Lithium Carbonate Market in Asia Pacific Depresses Amidst New Developments

Singapore: In the past few weeks, the Lithium Carbonate market in the Asia Pacific region held a steady position amidst the limited spot trading traditionally experienced towards the year's end. That is coupled with the ongoing weak performances in the Chinese Lithium market. As a ripple effect, Lithium Carbonate (battery grade) offers have softened by -0.44% since December amidst the drop in inquiries in the domestic market. This drop is the second consecutive in 2022, whereas last year, the offers consistently maintained an upward trajectory.

According to significant Lithium Carbonate giants, the active participation of the far east Asian market players, especially from South Korea and Japan, has been muted to a certain extent regarding new inquiries for Lithium Carbonate. Traditionally, Korean or most of the manufacturers across the region limits their spot purchases for Lithium Carbonate as they were more inclined to restrict the cash outflow and promote inflow by destocking practices from downstream to show a better financial outlook in their annual reports. However, long-term contractual regarding Lithium Carbonate trading has operated generally with no significant changes.

At the same time, the Chinese Lithium Carbonate manufacturers have also observed a significant slowdown in new inquiries for the vital Lithium downstream derivatives. The data released by the Chinese authorities showcased an apparent plunge in EV sales, impacting the complete value chain. As per the industry experts, the New Energy Vehicles subsidies provided by the Chinese authorities will entirely be revoked by the year's end, making the EV manufacturers highly cautious about the upcoming inquiries and offtakes. In November, primary market sources stated that most domestic players have sufficient inventories to sustain production for the next four months.

As a ripple effect, the impact has been witnessed across the Lithium Carbonate values chain, even depressing the feedstock Spoudumene market. In recent terms, Australian Lithium miner "Pilbara Minerals" latest spodumene concentrate auction resulted in lower bids than traditional or previous auctions.

According to the ChemAnalyst pricing Intelligence, this market trend will likely cloud the Lithium Carbonate market in the Asia Pacific region until the end of the Lunar new year holidays. Although currently, the downstream players were persistently pressing the Lithium Carbonate manufacturers to drop the offers amidst the weaker performance of the Chinese market.