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Chinese lithium hydroxide prices played catch-up amid tight supply – report

Chinese lithium hydroxide prices played catch-up with those for lithium carbonate and experienced a double-digit percentage growth for two weeks in a row amid tight supply and strength from China’s lithium carbonate market, Fastmarkets reports.

According to the analyst’s assessment of the lithium hydroxide monohydrate, LiOH.H2O 56.5% LiOH min, battery grade, spot price range, exw domestic China was $45,697-48,848 per tonne on Thursday, which marked a 10.09% increase per tonne from a week earlier.

On the other hand, lithium carbonate, 99.5% Li2CO3 min, battery grade, spot price range exw domestic China was about $​​55,213 – 58,368 per tonne on Thursday, up by $1,577-3,155 per tonne from a week earlier.

“A majority of market participants noted that battery-grade lithium hydroxide was as hard to secure as battery-grade lithium carbonate in the spot market, with demand for the former remaining strong,” Fastmarkets’ report reads. “The battery-grade lithium hydroxide price is catching up with that of battery-grade lithium carbonate this week, due to scarcity of spot units. And this supply shortage is not going to be eased any time soon.”

The research firm pointed out that multiple producer sources said that they were sold out of battery-grade lithium hydroxide and that even though some buyers convert lithium hydroxide to lithium carbonate due to the latter’s better margin, battery manufacturers’ demand for lithium hydroxide remained firm, and their demand has been growing in the weeks ahead of the Chinese New Year as they restock for production during the holiday.

Fastmarkets experts also mentioned that since battery-grade lithium hydroxide and carbonate both feed on spodumene, whose price is very high due to limited availability in today’s market, it makes sense that as battery-grade lithium carbonate price rises, lithium hydroxide prices catch up eventually.

“Fastmarkets’ price assessment for spodumene 6% Li2O min, cif China was at $2,500-2,750 per tonne on Thursday, up by $100-150 from $2,400-2,600 per tonne two weeks earlier,” the dossier states. “China’s battery-grade lithium carbonate price slowed down its rally ahead of the Chinese New Year with domestic transportation starting to come to a halt in the second half of this week.”

The document also mentions that spot units of battery-grade lithium carbonate were almost sold out everywhere this week as market participants scrambled to get hold of the material. Despite this situation, the analyst sees a bullish sentiment about lithium carbonate prices in China and expects them to rise further after the Chinese New Year holiday.

“Battery-grade lithium carbonate will remain in a shortage and market participants broadly expect demand to remain steady, which would support prices,” the report states.

East Asia

Fastmarkets’ dossier also looks at the East Asian seaborne lithium hydroxide market, which experienced more growth than that of lithium carbonate due to stronger demand for the former.

The firm’s price assessment for the lithium carbonate, 99.5% Li2CO3 min, battery grade, spot price was at $43-46 per kilogram on a cif China, Japan and Korea basis on Thursday, up by $1 per kilogram from $42-45 a day earlier.

The researcher notes that prior to Thursday, prices had remained at $42-45 since January 11.

When it comes to lithium hydroxide monohydrate, LiOH.H2O 56.5% LiOH min, battery grade, spot price was $39-41 per kilogram on Thursday, unchanged from a day earlier. The price went from $36-38 per kg on Monday to $38-40 per kg on Tuesday, before climbing further to $39-41 per kg on Wednesday.

Nickel-cobalt-manganese (NMC) batteries have a bigger market share in the Japanese and South Korean markets,” the report reads. “Naturally, demand for battery-grade lithium hydroxide is stronger than that for battery-grade lithium carbonate.”

According to Fastmarkets, consumers in East Asia’s seaborne market were reluctant to accept high prices for battery-grade lithium hydroxide because they have ongoing long-term contracts for material at much lower prices. However, amid the tight supply, they gradually had to accept higher spot prices.

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