Seaborne lithium prices in Asia rise further on tight supply

Seaborne lithium prices continued to edge up in Asia on tight availability over the week to Thursday November 4, with momentum in China filtering through to the wider regional market.

?EUR? Seaborne Asian battery-grade lithium hydroxide prices continued to make notable gains amid elevated offers.
?EUR? Battery-grade lithium prices steady in China on strengthened optimism for LFP batteries.
?EUR? European, United States lithium prices tracked Asia's upward movements.
In Asia's seaborne market, suppliers of battery-grade lithium issued aggressive offers, with tight supply becoming a lingering headache for consumers in the region.
Fastmarkets' weekly assessment of the lithium hydroxide monohydrate 56.5% LiOH.H2O min, battery grade, spot price, cif China, Japan & Korea was $28-30 per kg on Thursday, up by $2 per kg from $26-28 per kg a week earlier.
While regional prices are playing catch-up, the Chinese market took a breather with a majority of participants being at an industry event.
Meanwhile, Chinese suppliers attempted to align offers in the seaborne Asian market with those in China's domestic market in light of elevated prices for spodumene, the key feedstock for lithium production in the country.
Fastmarkets' assessment of the lithium hydroxide monohydrate, 56.5% LiOH.H2O min, battery grade, spot price range, exw domestic China was 185,000-205,000 yuan ($28,915-32,041) per tonne on Thursday, unchanged from a week earlier. Prices have risen by nearly 12% in the past month.
Fastmarkets' fortnightly price assessment for spodumene 6% Li2O min, cif China basis was $2,100-2,500 per tonne on October 28, narrowing upward by $100 per tonne from $2,000-2,500 per tonne two weeks earlier. The price is up by over 150% since the start of the second half.
Surging spot prices have also driven up prices for long-term contract cargoes, which were around $1,600-1,800 per tonne in late October. In late July, contract prices were hovering around $700-900 per tonne, according to data collected by Fastmarkets.
In addition, other market sources cited rising processing fee for producing battery-grade lithium hydroxide from spodumene, which resulted in higher offers for the hydroxide units in both China and the seaborne market.
Extensive power restrictions in China have also disrupted the production of a variety of auxiliary materials used to produce lithium salts. The rising cost of producing auxiliary materials eventually led to the higher processing fees.
A market source noted that current some lithium producers' processing fees had risen to around 35,000 yuan per tonne, compared with typical rates of 20,000 yuan per tonne. Refineries with additional capacity to take on tolling business - to process spodumene into lithium hydroxide - have risen their fees as high as 60,000 yuan per tonne.
Lithium carbonate prices rise
Meanwhile, battery-grade lithium carbonate prices have mostly risen over the past week amid a tight global market.
Fastmarkets' assessment of the lithium carbonate 99.5% Li2CO3 min, battery grade, spot price, cif China, Japan & Korea was $26.00-27.50 per kg on Thursday, up by $0.50 per kg on the low end from $25.50-27.50 per kg last week.
The lithium carbonate 99.5% Li2CO3 min, battery grade, spot price ddp Europe and US also rose by $0.50 per kg to $25.50-27.50 per kg, from $25.00-27.00 per kg a week earlier.
Fastmarkets' assessment of the lithium carbonate 99.5% Li2CO3 min, battery grade, spot price range, ex-works domestic China was at 195,000-200,000 yuan per tonne on Thursday, flat week on week. But the price has edged up by nearly 9% within a month.
Logistical bottlenecks for units shipped from South America and a seasonal production reduction in China's Qinghai province in winter have contributed to the supply constraints at a time when sentiment remains strong amid an optimistic outlook for lithium iron phosphate (LFP) batteries, which typically feed on lithium carbonate.
In this week's industry event in China, a majority of participants expressed astonishment at how quickly LFP batteries had grasped the market share in China in the past year. They reckon it would hold the dominant position in the country over the next couple of years.
As such, spot offers for carbonate units from China have been limited, market participants told Fastmarkets.
That said, market participants also noted that consumers, especially from the wider seaborne market in Asia, who mostly rely on long-term contracts for supply, had found it difficult to digest such a quick price increase.
"Buyers are stretching to the edge and trying to figure out how to make the numbers work," an Asia-based trader said.
But he also noted that any suppliers with available spot units in hand would likely take advantage of the tailwinds in the battery supply chain.

Learn more about Fastmarkets' lithium pricing methodology here, and read the latest lithium price spotlight here.
Fastmarkets' trade log for battery-grade lithium hydroxide, spot price cif China, Japan & Korea includes all trades, bids and offers reported to Fastmarkets.
All lithium carbonate, hydroxide and spodumene prices are available in our Battery Raw Materials Market Tracker. Get a sample of the report here.

Uranium volatility after Russia's US export restrictions

Gold stocks rebound on metal bounce and equity rise

Crypto market size continues to catch up with gold

Crypto stealing some of gold's thunder

Gold stocks drop on metal price decline