Cooling demand, excess supply to lower lithium carbonate prices Jun-Sep

SHANGHAI, Jun 4 (SMM) – Slower downstream demand and greater production of lithium carbonate will grow pressure on prices of materials in June-September. However, the downside room will be constrained given limited profits across producers of lithium salts, SMM estimated. 

Output of cathode materials, the major downstream consumer of lithium carbonate, was flat on the month in May after rapid growth in April, indicating slower downstream purchases last month. Production of lithium carbonate increased 18% in May to stand at 13,700 mt, and is expected to extend the increase in June. 

SMM expects the domestic output of lithium carbonate to grow 14% from May, to 15,700 mt in June. 

Downstream demand was robust in April as the cathode material of lithium manganese oxide (LMO) and lithium iron phosphate (LFP) jumped 15% and 29%, respectively, on the month in April, SMM data showed. 

Last week, prices of lithium carbonate started to slip with producers reporting poorer sales of battery-grade lithium carbonate than industrial-grade materials. While trades mostly occurred below 79,000 yuan/mt for battery-grade lithium carbonate, offers of 75,000 yuan/mt and lower were heard in the market. 

As of May 31, prices of battery-grade lithium carbonate stood at 76,000-78,000 yuan/mt, down an average 500 yuan/mt from the previous week. Stable demand kept prices of industrial-grade materials flat on the week at 66,000-70,000 yuan/mt.