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Pilbara Minerals’ fourth spodumene concentrate auction saw 5,000 mt spodumene concentrate with 5.5% lithium oxide, loading between June 15 and July 15, sold at $5,650/dmt on an FOB Port Hedland basis on April 27, equivalent to $6,163.6/dmt for 6% lithium oxide.
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The freight rate to China was $90/dmt. General expectations had been for a price in a $5,000-6,000/mt range, sources said.
The 5,000 mt of spodumene was equivalent to Yuan 376,600/mt of battery-grade lithium carbonate cost of production inclusive of 13% VAT and Yuan 20,000/mt of processing and refining fees.
“If we think about it, there is still enough margin for lithium converters,” an international trader said.
S&P Global Commodity Insights assessed battery-grade lithium carbonate at Yuan 467,000/mt on April 27, and battery-grade lithium hydroxide at Yuan 498,000/mt, with both assessments on a delivered, duty-paid China basis.
“In the last second, bids jumped from $4,700 to $5,650,” a Chinese bidder said.
A Japanese lithium converter had expected a price of $5,000/mt, because “Q2 LTC was around $5,000/mt”.
The loading period meant the material may reach China around August, with production expected in September.
“Since it is a forward shipment, it feels that the market will reach $55,000/mt for battery-grade lithium carbonate in August since lithium is in backwardation now,” a trader said.
However, “there is a risk that you could be losing money when you sell the product later on if prices keep dropping,” the Japanese lithium converter said.
Prices of lithium carbonate have fallen Yuan 33,000/mt, or 7%, since the start of April when it was Yuan 500,000/mt. Lithium hydroxide dropped Yuan 2,000/mt, or 0.4%, over the same period.
Looking forward, some sources were still expecting relatively high spodumene prices to keep lithium chemical prices buoyant into the second half of 2022.
“Shanghai may come out of lockdown in May. There may be pent-up demand,” a trader said, expecting better demand moving into May.
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