New projects, restarts and upgrades — prompted by  higher profit margins — will lift global spodumene capacity by 180,000 tonnes per year of lithium carbonate equivalent (LCE) when they come on-stream, according to new Argus analysis.

This will help rebalance the market in the coming two years, it says.

Argus last assessed 99.5% grade lithium carbonate prices at 185,000-195,000 yuan/t ex-works on 21 October – up 276% since the start of 2021.

On October 15, Benchmark Minerals Intelligence estimated that battery grade lithium carbonate (ex-works China) was up 322% in 2021, while lithium hydroxide had gained 252%.

When it comes to raw materials supply, like spodumene, the numbers are just as impressive. Average prices for the hard rock feedstock are currently up more than 270% from below $US500/t year-to-date.

Miner Orocobre (ASX:ORE) says it achieved contract pricing of around $US1,650/t for October-December spodumene contract sales and around $US12,000/t for lithium carbonate contract sales.

That’s a 100% gain in just three months.

Meanwhile, Pilbara Minerals’ (ASX:PLS) third auction on the Battery Material Exchange (BMX) digital platform for 10,000t (SC5.5%) spodumene went off at a record $US2,350/t.

It outshines auction two on September 14, which went off at a then-incredible $US2,240/t to singlehandedly spark a historic 86.5% month-on-month increase for average spod pricing industry-wide.

ORE, PLS share price charts

 

With very little new production due to come online in the short term,  the immediate outlook remains bright for miners.

 

Who’s ramping up?

In Tuesday, Australia’s next lithium producer Core Lithium (ASX:CXO) officially started construction of the 197,000tpa ‘Finniss’ project in the Northern Territory.

First production of lithium spodumene concentrate is scheduled for Q4 2022, it says.

 

The 750,000tpa ‘Wodgina’ project in the Pilbara region – owned by US-based Albemarle and Australia’s Mineral Resources (ASX:MIN) — is on track to restart operations by the third quarter of 2022.

MinRes shares rose 9% on the back of the news, with the company aiming to initially resume production from the first 250,000tpa train at Wodgina.

 

Albemarle is also raising its capacity at the La Negra III and IV projects in Chile, which will have a combined capacity of 40,000tpa of lithium carbonate when commercial operations begin in the first half of 2022, Argus says.

Talison Lithium’s Greenbushes mine is on target to ramp up its spodumene output to 1.3 million tonnes in 2022 from around 800,000t this year.

Pilbara Minerals is expecting first concentrate from its Ngungaju plant – the old Altura operation — in January-March next year. It has raised its spodumene production guidance to 460,000-510,000t for FY22, up from 281,088t in the previous year.

Several spodumene and brine projects in China are also ramping up capacity, Argus says.

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