For the Quarter Ending December 2023
The fourth quarter of 2023 was challenging for the Lithium Metal market in North America. In October, Lithium Metal faced weakened market sentiment, resulting in declining prices due to an influx of low-priced imports in the US. Despite expectations for a recovery after the Chinese holidays, demand remained subdued, leading to a continued price descent. During the fourth quarter, lithium metal prices experienced a notable decline, attributed to an influx of low-priced imports saturating the domestic market. Downstream lithium-ion battery manufacturing industries also faced subdued demand.
The global bearish pricing trend was influenced by the Asian market, particularly China, where sellers urgently attempted to unload inventories. In December 2023, Lithium Metal prices in the US domestic market saw a significant decrease due to subdued demand and an influx of low-cost imports. The lithium-ion battery manufacturing sector experienced reduced demand, leading to shrinking profit margins for manufacturing firms.
Oversupply from exporting nations, notably China, and excessive imports from Zimbabwe and Australia contributed to sluggish new order growth globally. Despite apparent strength in European auto sales, the profitability of the electric car sector declined due to unsold EVs and concerns about affordability compared to internal combustion engine vehicles. The price of Lithium Metal (99.9%) FOB Boston in the USA at the end of the quarter was USD 145,615/MT.
In the APAC region, the lithium metal market in the fourth quarter of 2023 witnessed a declining trend. In October, lithium metal prices in China initially faced uncertainty but stabilized after the Golden Week holiday. Sellers halted further price drops, maintaining stability amid expectations of fourth-quarter restocking. Although offers rose with positive future performance, demand remained demand-driven, resulting in low-volume trades. Supply chain operations improved slightly, and no major port congestion occurred. However, November witnessed a decline in the lithium metal market due to persistent weak demand in the Chinese spot market. Manufacturing costs consistently decreased, driven by plummeting spodumene prices. Demand from the lithium hydroxide market remained minimal, despite a global increase in battery electric vehicle (BEV) and plug-in hybrid electric vehicle (PHEV) sales. In December, China experienced a significant drop in lithium metal prices due to increased affordable imports and sluggish demand. Sellers consistently lowered prices, influenced by declining raw material prices and oversupply from Zimbabwe and Australia. Market activities were limited, and weakness in the lithium metal futures market further impacted prices. Despite this, FADA reported a substantial year-on-year increase of 49.25% in electric vehicle sales in China in 2023. The quarter ended with a price of USD [insert price] per MT of Lithium Metal (99.9%) FOB Shanghai in China.
In the fourth quarter of 2023 (Q4), the Lithium Metal market in Europe experienced a plunging price trend. In October, the German Lithium Metal market faced a significant decline in sentiment and prices due to weak demand from downstream sectors and an influx of low-priced imports. The negative business atmosphere in Europe and reduced capacities during the August vacation season added to the downturn. October witnessed a slow market rebound, with cautious consumer behavior in the lithium-ion battery and energy storage systems sectors. November continued the trend of declining Lithium Metal prices in Germany, attributed to persistent weak demand and the impact of low-priced imports, notably from China. The European market, including the lithium-ion battery and energy storage sectors, experienced decreased demand. The decline in Lithium Metal prices in December further affected the domestic market, leading to reduced demand in the lithium-ion battery manufacturing sector. Oversupply, influenced by excessive imports from China, Zimbabwe, and Australia, impacted North American and European markets. Major automakers like Volkswagen, GM, and Ford struggled with unsold EVs, reflecting the challenges of affordability in the current macroeconomic environment and lower-than-expected EV demand. The latest price of Lithium Metal granulate FOB Hamburg in Germany for this quarter is USD 41361/MT.
For the Quarter Ending June 2023
The price of Lithium Metal in the US market declined in the second quarter as the largest exporter among South American manufacturers, such as Chile, reduced its price to attract its downstream lithium-ion battery manufacturing industries from local and overseas markets. The reduced activity rate in the downstream Asian market impacted the demand percentage growth. Meanwhile, the overall lithium market is observed to be in a stable state in the US spot market, assisted by the slowdown in new orders and the slippery slope of export sales. The supply chain was operating at optimum levels, and sufficient inventories of the product were reported. However, the supply gap widening and thriving demand for EV batteries means that the declining tendency of Lithium Metal prices may not last long. The surge in the spot market prices of Lithium carbonate in the Asian market resulted in the decline of the offered quotes in the region as the market participants lowered the profit margins amidst rising market competition.
The price of Chinese Lithium Metal showed a declining trend in the second quarter, despite the price increase in the initial phase of Q2. In April, the price of Lithium Metal was observed to have an uprising trend as the domestic inventories started drying up. It became very difficult for domestic players to procure raw materials due to the inadequacy of upstream lithium mica and the sluggish pace of the lithium manufacturing rate. If we look around the demand scenario, several facts are playing there, such as shifting consumer preference to Electric vehicles (EVs) from traditional ICE cars, Foreign major player investments, all of which set the demand rocket high, valued at around 964,000 tonnes/year. Further, as per economic experts, a lithium supply deficit will continue for a few more months, at which point the production rate will overtake demand from the buyer’s side. As it will take a decade for the lithium mines to get run, it is estimated by the demand-supply curve that the market will see a price surge of Lithium.
In the second quarter of 2023, the price of Lithium Metal showed a bearish market trend in the German spot market. The reduction in export quantity also shows a downfall in nature due to declination in the demand curve slope of the Asian battery manufacturing industry. Some other facts playing behind are the lack of competitiveness of the market participants, consumer tendency to purchase goods at a lesser amount both domestically and internationally, etc. The supply outlook in the Belgium market is also bearish because adequate inventories of the product is available in that region. All the port operations and supply chains are running smoothly without any constraints. In May, the market sentiment dropped further in the domestic market of Belgium due to the lowering of price pressure from the major exporter Chile. Also, the demand strength from the downstream lithium-ion battery manufacturing industry and Energy storage system (ESS) market seemed to be weaker.
For the Quarter Ending March 2023
During Q1 of 2023, the Lithium Metal prices in the US market declined as downstream players adopted a wait-and-see approach amidst a lack of inquiries from the Electric Vehicle (EV) sector. Manufacturers had reported that spot lithium prices fell in January, following a global downtrend in lithium prices caused by the more liquid domestic Chinese market. The supply outlook in the domestic market had remained sluggish in January due to decreased market participation among downstream players and the impact of extreme weather on regional production rates and transportation logistics. In February, some sellers of lithium stocks had preferred to destock and lower their offer prices rather than risk bigger losses if the global decline continued. The EV industry's poor performance had resulted in low demand for battery raw materials, which had further pressured prices downward. In March, Lithium Metal prices in the US market had dropped due to low buying interest among end-users and ample supply, leading to oversupply and continued downward pressure on prices. As a result, the Lithium Metal prices for FOB Boston (USA) had settled at USD 369802/MT.
During the first quarter of 2023, the Lithium Metal market experienced a bearish sentiment with reduced buying appetite and a persistent lack of demand. Market participants observed a sluggish market with few trades due to low demand. In an attempt to boost sales in a stagnant market, some eager traders lowered their offers in January, but the low demand continued. Producers suspended production due to thin order books, which kept demand for lithium salts low. Top-tier manufacturers primarily focused on export orders while fulfilling only a few domestic orders. Lithium prices decreased both domestically and internationally due to weak domestic demand and changes in supply and demand patterns in other countries. In March, downstream plants remained active, focused on destocking, and some still maintained low operating rates. Despite mainstream manufacturers reducing their offers, market transactions remained poor. Buyers reported sluggish demand and were unwilling to pay high prices for lithium, leading to a drop in upstream lithium hydroxide prices. Lower prices in China put pressure on lithium prices globally, despite strong overseas demand. As a ripple effect, Lithium Metal prices for FOB Shanghai (China) settled at USD 381375/MT.
Throughout the first quarter of 2023, the European Lithium Metal market exhibited a mixed sentiment due to sturdy downstream inquiries from the EV market. However, participants noted that demand remained sluggish in January, and industrial buyers opposed higher price levels. Despite a predicted increase in supply, lithium projects had faced difficulties in meeting their supply targets, leading to a lack of activity in the spot market. Some European distributors had taken advantage of the softening Chinese market, but the domestic market's pessimism had contributed to a downward trend in spot prices in mid-Q1. Although some lithium stocks had been purchased in March at higher prices, sellers wanted to reduce their offer prices and destock them rather than risk further losses. Additionally, the European companies had struggled to acquire Lithium resources in Chile and Argentina due to mismatched supply and demand profiles, with producers expected to explore integrated conversion facilities and include processing capabilities to address the supply-demand gap. As a ripple effect, the Lithium Metal granulate prices for FOB Hamburg (Germany) settled at USD 87342/MT.
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.
For the Quarter Ending June 2022
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.