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Monsters of Rock: Lithium prices hit bear note in China as miners suffer case of the Mondays
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- Lithium carbonate price falls for third straight week in China
- LFP manufacturers destocking after power cuts fail to materialise
- ASX battery metals and iron ore miners hit hard on Monday
Lithium prices have been falling in China, taking some shine off the stabilisation seen since the market halted its reversion from record highs in April.
That has done a number on ASX listed lithium stocks today.
Late last week Fastmarkets reported weekly lithium carbonate prices down 20,000RMB in China to 240,000RMB, or around US$33,000/t.
Lithium hydroxide prices were slightly lower, with North Asian prices on Friday dropping US$1250 and US$1500/t respectively to US$36,000/t and US$35,750/t for hydroxide and carbonate.
Spodumene prices remain strong for producers at US$3450/t for 6% Li2O concentrate into Asia, the main product shipped by Australian producers.
Analysts at the Shanghai Metals Market this month said lower LFP cathode production had been a factor in weaker pricing.
Some large and medium factories scaled up production in June expecting potential power rationing ahead of summer, with the northern hemisphere experiencing massive heatwaves last month.
“In July those enterprises were not affected by substantial power cuts, so production was slightly reduced to consume the stock prepared in the previous period,” SMM said.
“Lithium carbonate, the main raw material, its price was in the process of falling in July.
“Under the influence of inclination to hold back from purchasing when market prices keep falling, battery cell companies reduced new orders and prioritised destocking. It is expected that the output of LFP may drop slightly in August.”
Demand to increase into December quarter
The SMM is expecting weak demand in early August, but says demand from energy storage and new energy vehicles could ramp up ahead of the peak season at the start of the December quarter.
“SMM expects that the demand in energy storage industry in the second half of the year will be released intensively from the end of September to the start of the fourth quarter; new energy vehicles will also embrace the traditional peak season of “Golden September and Silver October”,” they said.
“Therefore, considering factors such as the raw material procurement cycle, it is expected that the overall market demand in the start of August will be weak. The recovery time may appear in late August.”
Carbonate prices have now fallen 23 days straight.
#China‘s #lithium carbonate price fell for 23rd straight day to hit new low in two months, lithium hydroxide price hit three-month low
https://t.co/d6Au8QwsCU https://t.co/PiVEwsL6pS
— YUAN TALKS (@YuanTalks) August 11, 2023
Miners slide early and keep slipping into the afternoon
The mood across the commodities space was as bearish as a bottle of Bundy with battery metals and lithium stars leading the falls.
Pilbara Minerals (ASX:PLS) dropped more than 6%.
Allkem (ASX:AKE) was down almost 4%, with MinRes (ASX:MIN) off 2.89% and iron ore majors Rio Tinto (ASX:RIO) and BHP (ASX:BHP) also more than 2% in the red.
