For the Quarter Ending December 2022
Overall the Lithium Metal prices in the North American region observed a slight to negligible shift during the last quarter. The impact of slowdown of Lithium salts in the far east Asian region has levied a considerable impact, as the rapid growth in the offered quoted has been limited. However, the cost support from the feedstock has remained persistent on an upward trajectory. Whereas, the Lithium ingot supply has improved after the import volumes drastically improved as the Asian Lithium ingot suppliers were keen to destock the running inventories ahead of the upcoming holidays. In addition, during the quarter's end, the market dynamics have disrupted considerably as the downstream manufacturers took precautionary measures by reducing or temporarily suspending the operating rates at the enterprises ahead of the extreme weather conditions coupled with the transportation disruptions.
In the fourth quarter of 2022, the Lithium metal market in the Asia Pacific region observed a considerable relaxation in availability as the considerable supply of the feedstock was diverted to make Lithium metal instead of Lithium salts for EV batteries. As per the market experts, the drop in the sales of EVs in China and the conservative attitude of the far east Asian markets to restrict the cash outflow in order to improve the enterprise's financial performance in annual reports has curtailed the demand for Lithium Salts. As a ripple effect, the Lithium metal growth has been limited, even though the cost support from the feedstock spodumene has remained at a higher level.
The Lithium metal in the European market has remained stagnant, with a considerable shift in the market dynamics during the fourth quarter of 2022. The cost of living in the region has soared to historic highs on the backdrop of rising inflation and interest rates. In addition, the supply and demand outlook both were pressurized amidst the high energy rates in the European markets. The smelters have dropped production to sustain netbacks. At the same time, a similar trend was also witnessed in the downstream industries. However, the demand deficit was covered by the import of Lithium metal from the overseas market.
For the Quarter Ending September 2022
Lithium Metal prices witnessed a plunging price trend in the third quarter of 2022 in the US market. According to market participants, rising demand for consumer electronics and lithium for producing electric vehicle (EV) batteries caused lithium prices to fall in July. Despite price pressures, Chilean miners anticipated an increase in lithium inquiries in the fourth quarter. However, the bearish price trend of Lithium Metal took a new turn in August and September, driving down the prices of companies dealing in the element, with Lithium Americas being one prominent manufacturer who faced indifferent results. Buyers argue that sourcing critical raw materials like lithium locally has been the only logical step toward creating a vertically integrated domestic supply chain. The emergence of a legitimate EV market is driving demand for lithium metal. In September, the company's lithium exports fell significantly in volume and price, falling 10% and 11%, respectively, month over month. As a ripple effect, the Lithium Metal (99.9%) prices for FOB Boston (USA) settled at USD 401670/MT.
In the Chinese market, Lithium Metal prices witnessed mixed sentiment in the third quarter of 2022 amidst fluctuations in the feedstock prices. Because of the ongoing maintenance period and the regional market's economic woes, the overall demand outlook remained constrained in July and mid-August. Record-breaking heat waves have hampered the outlook for domestic supply in China's ongoing energy crisis. Furthermore, the Chinese electricity shortage forced limited transactions and market participants to wait and watch the outlook. However, the domestic Lithium Metal market price was at an all-time high in September. The cost of upstream lithium carbonate was running strongly, coupled with an increase in downstream stocking and purchasing, cost-side support, and demand-side increased, driving the market to run strongly, the overall market trend was positive, and the focus of lithium hydroxide market negotiation was high. As a ripple effect, the Lithium Metal (99.9%) prices for FOB Shanghai (China) settled at USD 451700/MT.
During the third quarter of 2022, Lithium Metal prices showcased a stagnancy in their price trend in the European market. According to market participants, the stagnant prices were caused by pandemic delays and supply disruptions driven by summer power outages in China and demand and supportive global policies that drove up electric vehicle sales. However, lithium metal prices have more than tripled in the last year, raising the cost of batteries used in electric vehicles, with recent gains driven by solid demand and disruptions at a domestic manufacturing hub. As market activity in Northwest Europe resumed in mid-September, the European Union passed the "Critical Raw Material Act" to ensure the supply of lithium and rare earth metals. As a ripple effect, the Lithium Metal granulate prices for FOB Hamburg (Germany) settled at USD 89650/MT.
The conflict in eastern Europe significantly impacted the North American Lithium Metal Ingot market during the second quarter of 2022. With the assistance of several other countries, the retaliatory sanctions imposed on Russia by the United States and the European Union hampered the supply of Lithium Metal used in the production of Electric Vehicle (EV) battery raw materials. At the same time, the resurgence of COVID in China has kept benchmark Lithium prices in the international market sluggish. Albemarle, a major specialty chemical company, based in the United States, is heavily investing in the South American market to ensure a steady supply of lithium ores. The demand outlook from downstream industries is likely to improve in the coming quarter. It may also impede the availability of essential battery raw materials and add additional costs to EV battery raw material prices in the future when combined with Russian sanctions.
In the Asian market, Lithium Metal Ingot prices fell significantly in Q2 2022 compared to the Lithium prices in March due to a sudden drop in domestic inquiries. After the COVID infection resurfaced in China, EV production suffered greatly as the disruption in the downstream supply chain impacted the vital raw materials market due to a sudden drop in China's overall demand outlook. Several Electric Vehicle facilities reduced their output, and numerous sites ceased production due to a lack of essential auto parts. The overall development caused by COVID, combined with the Chinese authorities' investigation into rising Lithium prices, poses a challenge to the sustainable transition to a greener economy. Overall restocking activities started last May after the Chinese authorities declared to curb the COVID restriction leading to a healthier public and market activity.
In the European market, the Lithium Metal Ingot prices witnessed bearish sentiments in the offered quotations during the second quarter of 2022. This development is primarily due to retaliatory measures taken against Russia by the United States and the European Union, with the assistance of several other countries, hampered the supply of critical essential upstream materials used in producing EV battery raw materials. Supplies from China were delayed because of restricted operations in China due to the resurgence of COVID. The Lithium Market bubble is nearing completion, and prices are likely to significantly increase in quoted offers by the third quarter of 2022. The demand outlook is expected to exceed supply capabilities, resulting in a significant deficit and widening the supply-demand gap.