Wednesday, August 30, 2023

"Lithium revival a dead cat bounce as prices slump to 20-month low"

This is a huge tell on both the supply and demand sides but more on the demand (end use). It's something that's been worrying a lot of observers for months.

From, August 30:

The lithium market has been in turmoil with dramatic rises and falls in prices over the last five years as demand from electric cars take off and global supply growth struggles to keep up.  

In its latest market assessment for the two weeks ending August 23, Benchmark Mineral Intelligence tracks an eye-popping 10.7% sequential decline in its lithium index, a sales weighted measure of global prices across grades.   

The index, now down by more than half in 2023, was dragged down by falling prices for hydroxide during the 2-week period due to poor demand for high-nickel cathodes in China, the dominant market for the battery material. 

Unusually, global prices for hydroxide at $33,508 a tonne fell to below that of carbonate. Lithium prices peaked in January this year with prices for both chemicals trading above $70,000 a tonne.

Continued weakness on the spot market in China with ex-works hydroxide now below $30,000, was filtering through to contract negotiations with CIF hydroxide prices in Asia falling 11% according to Benchmark.

Europe, North America follow Asia down
The London-HQ research consultants says European and North American hydroxide prices suffered similar declines with buyers successfully negotiating lower hydroxide prices for both spot and contract volumes using lower prices in Asia as leverage...


The Chinese cartel had set 250,000 yuan per ton as their line in the sand. It didn't hold. 
Cartels are hard.

Some of the links in July 6's "Australia forecasts brutal lithium price correction as output surges": 

Elon Musk Said Lithium Mining Is Not A Bottleneck, Lithium Refining Is; And He Thought... (TSLA)
...we should do that.And:
"Electric vehicle battery makers test a future without lithium"
"How China is winning the race for Africa’s lithium"
"Chinese Lithium Finally Ticks Up After Five-Month Slide"
World Bank: "Commodity Prices to Register Sharpest Drop Since the Pandemic" (special focus: metals)
Reuters "Exclusive: Chinese lithium producers set price floor as demand evaporates, sources say"
You may have noticed lithium becoming unloved and unwanted:*


Chinese spot prices, yuan per ton, for Lithium Carbonate, 
99.5% Li2CO3 min, battery grade from Trading Economics
*Related (mommy, why is that man standing on his desk naked and yelling about lithium?): 

And hundreds more, use the 'search blog' box, upper left, if interested.