China’s Battery Grade Lithium Carbonate Prices Skyrocket to New Highs Amidst Tight Supplies

With soaring demand for electric vehicles (EV) battery materials, the supply of key ingredients of batteries have skyrocketed in recent months due to demand outpacing the supply. As per ChemAnalyst database, FOB Shenzhen (China) price for battery grade Lithium Carbonate (99.5%) was quoted around USD 32910 per MT, up by about 250% since the beginning of this year and 11.94% on month-on-month basis.

As per market players, the supply side has shrunk to a greater extent, and there is almost no increase in supply. Since the beginning of this year, the price of lithium salts has continued to rise with several Chinese traders and factories reporting consumed inventory levels, as the contradiction between supply and demand has intensified.

“Spot price of Lithium Carbonate has continued to rise, and contract prices have also rallied beyond expectations, forcing global battery makers to transfer the increases to end consumers. Lithium Carbonate prices are likely to average at USD 18,100 per tonne in 2021, up by around 180 per cent on year-on-year basis,” stated a respondent. As per the latest statistics, China's total output of power batteries rose to 159.79 GWh during January-October, up by 251% on the year, while installed volumes increased by 168% to 107.5GWh over the same period.

Prices are further supported by high Lithium concentrate values. The spot prices of spodumene concentrate have climbed all the way up since the fourth quarter of 2020. According to Asian Metal, as of the first week of November, the average spot price of spodumene concentrate (6%,CIF) was USD 1410/mt, up by about 230% from the start of 2021 .

As per market players, LiCO3 price trend in China will continue to remain firm and there are fears that skyrocketing prices will likely slow down people’s adoption of EVs. Prices could stabilize later in H2 2022 if the supply-demand situation finds a balance. As many OEMs are shifting over to carbonate-based batteries due to stronger margins, the demand is likely to remain robust in the coming months. High spodumene costs and continued energy controls in China may trigger another double-digit increase in LiCO3 pricing in the coming weeks.