Chinese Lithium Carbonate Benchmark Prices Consistently Cool Down in February

Singapore: Lithium Carbonate has persistently maintained a downward trajectory over the benchmark offers for industrial and battery grade since the start of 2023. The revocation of the government's New Energy Vehicle (NEV) subsidies in China, coupled with the Lunar New Year holidays, has suppressed the enthusiasm amongst the downstream Cathode Active Materials (CAM) manufacturers to place new inquiries. A major CAM manufacturer in China informed that "the majority of CAM producers in the region have a high inventory of feedstock Lithium Carbonate running and rapid buying only inflate the prices by pressurizing the supply of crucial Lithium salts such as Lithium Carbonate and Lithium Hydroxide, besides neglecting the possibilities of a crucial downturn over EV sales and netbacks."

From the observation of the market shifts over the past couple of weeks, it has been observed that the Lithium Carbonate market is still in a continuous cooling down, whereas the Lithium Hydroxide market has stabilized post the Lunar New Year holidays. However, the no. of inquiries over the last week has gradually improved, despite the spot transactions being comparatively low. The operating rates at the manufacturing facilities and smelting enterprises are still maintained at lower levels amidst the ongoing repair and maintenance work, and the manufacturers are fulfilling the order supply temporarily by de-stocking the running inventories. At the same time, the overall demand outlook for Lithium Carbonate from the downstream industries has remained at lower levels compared to the third quarter of 2022.

As per the ChemAnalyst pricing intelligence, the Lithium Carbonate market is likely to persist on a downward slope in the upcoming short term. The Lithium market will be in a state of solid supply and weak demand outlook for Lithium Carbonate amidst the high negotiations for long-order signing, uplifting the wait-and-see attitude amongst the downstream players and Lithium Carbonate suppliers in the domestic market. In addition, the market situation after the Lunar New Year holidays has not yet fully recovered. Therefore, the offers for Lithium Carbonate are anticipated to remain downward in the short term with instigated volatility in the Chinese domestic market.