How Are Raw Material Prices Holding Up amid Lithium Salt Price Downturn?

SHANGHAI, Jan 9 (SMM) - Against the background of weakening demand in the domestic market and pessimistic expectations, the price of lithium carbonate kept falling. One salt lake company released 2,000 mt of industrial-grade lithium carbonate into the market, and another salt lake company intends to sell 900 mt of lithium carbonate in order to raise funds for its new project. 

From the perspective of the supply side, salt lake-based lithium carbonate production has fallen since December due to seasonal factor, and some mica-based smelters in Jiangxi were under maintenance in the wake of environmental protection issue, reducing the overall supply. This month, most spodumene-based smelters have maintenance plans. 

On the demand side, due to weakening demand for power batteries and pessimism over demand in Q1, orders received by cathode active material (CAM) plants fell considerably. In this context, CAM plants adopted destocking strategy and barely purchased in the spot market.    

In terms of cost, the price of lithium concentrate is stable at present, but may go down with the drop of lithium salt price and the increase in mine capacity. Lithium salt plants lowered purchase prices in order to reduce their costs. Today, the average price of SMM spodumene concentrate (6%, CIF China) stood at $5,500/mt, which was $5/mt lower than yesterday. 

On January 5, Australia’s Core Lithium announced that its first batch of lithium ore with a grade of 1.4% had been shipped to China on December 30, 2022, with a volume of 15,000 mt, and the auction price was $951/mt.