Lithium market - what prices are telling us?

#Fastmarkets' Lithium and spodumene prices have started to rebound off the lows set earlier in the year and as such, the outlook is looking brighter. The four price charts in today's Fastmarkets’ Battery Raw Materials Market Tracker, see above, provides some room for optimism as the price trends are turning higher. The ex-works China prices led the way, in that they started to turn higher before the cif China Japan Korea (CJK) and ddp Europe and US price series.

The Tracker provides a weekly insight into the markets, looking at what’s been driving prices, the news and how developments along the supply chains are expected to change the outlook, both fundamentals and sentiment.

While the team focuses on studying the news and the markets’ fundamentals to work out what is unfolding in the market, sometimes just stepping back and looking at what the market itself is telling you, can also paint a picture. The four charts above are saying:

1) Spodumene prices have turned higher ahead of previous lows that were seen in 2020 (given how much inflation mining has seen since 2019-2020, that makes sense).

2) Chinese lithium carbonate prices were the first to turn higher, they turned higher in late-January, with the cif CJK following in early-March and the ddp Europe and US prices following in mid-March. This suggests the recovery in demand was first seen in China, with the recovery there now supporting other regional prices.

3) The bottom two charts show the regional prices for carbonate and hydroxide in ex-works China, cif CJK and ddp EU/US. Over the years, Chinese prices have tended to lead on the way up and on the way down. It happened at the top of the market in late-2017, it happened at the bottom of the market in late-2020 and it happened at the top of the market in late-2022. The charts show the regional prices are now converging with the ex-works China prices on the rise and looking set to cross above the other regional prices.

Lithium carbonate prices in the ex-works China market have now climbed by 16.8% from the late-January low, while cif CJK and ddp EU/US prices have only just edged higher, being up 4.5% and 3.6% respectively from their earlier lows.  

This bodes well for at least a base being in place, but more likely a price recovery in the short term.

If you would like to find out more about the Fastmarkets’ Battery Raw Materials Market Tracker then follow the link…

Market-reflective prices, forecasts and insights for the battery materials markets