Lithium Hydroxide Spot Prices and Supply Dynamics

Sources cited indicative bids for spot cargoes from North Asian buyers at about the low $70s/kg on a CIF North Asia basis.

"There are many bids for spot volumes as well as interest in forward cargoes from various North Asian precursor makers," a source from a Chinese refiner said.

The numbers of monthly shortages of 500-600 mt each for multiple precursor makes were due to a change in allocation of term contract volumes, several market participants estimated.

South American lithium producers have been also directing an increasing part of their volumes to European buyers within this year instead of having their volumes booked a year in advance, in view of the market's extreme volatility and upward demand price trend last year, an international trader said.

Chinese refiners were reported to have offered levels of about $80/kg, boosted by spot supply scarcity and strong domestic prices in China.

The majority of refiners producing lithium hydroxide favor selling nearly all their volumes into term contracts, and that leaves only a meager amount available for spot, a Chinese trader said.

Domestic Chinese quotes will also maintain these high levels, especially as most of the current refining capacity is being used for lithium carbonate rather than lithium hydroxide, a second trader said.

Sellers in China, however, might have to lower their prices range if they want to move their volumes, but that was on the back of strong North Asian demand.

North Asian cathode precursor producers and battery makers have long-term agreements with EV makers that may not offer much room for profits at current spot prices, a market source said. Accordingly, North Asian buyers are certainly not in a hurry to lock up any cargoes at whatever prices may be on offer, and may well prefer to put off production if the supply cannot be secured, the source said.