Lithium Concentrate Blues: Chinese Smelters Suffer Losses as Prices Collapse Despite Imports

China: Chinese Lithium Carbonate smelters were able to turn a profit last year by utilizing imported Lithium concentrate in their production process. Even though the import prices for Lithium concentrate were higher than the prices for Lithium Carbonate, the smelters were able to take advantage of the upward trend in Lithium Carbonate prices and sell at a profitable rate.

According to recent reports, Chinese smelters of Lithium Carbonate managed to turn a profit in the previous year by utilizing imported Lithium concentrate in their production processes. Even though import prices of Lithium concentrate were higher than Lithium Carbonate prices, smelters took advantage of the uptrend in Lithium Carbonate prices and earned gains by subsequently selling the processed product.

This year has seen a complete reversal of the situation, with a sharp drop in domestic Lithium Carbonate prices. Last year's peak of 600,000 yuan/mt has been replaced with the current price of less than 200,000 yuan/mt, which resembles a cliff-like fall.

To demonstrate the current state of domestic Lithium Carbonate smelters, it was necessary to refer to the average prices of battery-grade Lithium Carbonate (192,500 yuan/mt) on April 14th and spodumene concentrate (6%) CIF China ($5,300/mt) on March 1st. This is since it typically takes approximately one and a half months for overseas Lithium concentrate to arrive in China.

According to the calculation formula, the import of Lithium concentrate with subsequent conversion into Lithium Carbonate for sale in the local market would result in a loss of up to 163,100 yuan per metric ton.