European Lithium Carbonate Outlook Seems Pessimistic, Oversupply Pressures Imports

Antwerp, Belgium: In the first half of October, Lithium Carbonate prices noted a slight upward trend in the European markets. The resurgence in demand from the Asian markets has prompted the sellers to raise their offered quotations after holidays in China. However, the resurgence has been temporary as the restocking activities were limited.

Additionally, the imports arriving in Europe have gone cheaper as lower freight rates from Asia made exporting more competitive than in recent months. Demand for Lithium Carbonate in Europe remained subdued, with market participants reporting no supply shortages in the region. As a result, the lower offers for Lithium Carbonate in Europe did not lead to an increase in sales.

As per the latest ChemAnalyst assessment, Lithium Carbonate Battery Grade DDP Antwerp prices settled at USD 11,600/MT for the week ending October 18, 2024.

The persistent oversupply of Lithium Carbonate in the region is heavily dampening market sentiment, pushing down both Lithium Carbonate and spodumene prices. To restore balance between supply and demand, more substantial production cuts are required. Meanwhile, European EV sales showed improvement in September. Electric vehicle (EV) sales in Europe increased by 4.2% to 0.3 million units, driven by a 24% surge in the United Kingdom and additional growth in Italy, Germany, and Denmark.

Recently, the EU set to impose significant tariffs on electric vehicle imports from China after securing the backing of most member states. The move, aimed at safeguarding the European car industry, responds to concerns over what EU leaders consider unfair Chinese government subsidies for its domestic EV sector. Tariffs on Chinese-made electric cars will increase from 10% to as much as 45% over the next five years. However, there are worries that this could lead to higher EV prices for consumers. The decision, which caused division among countries like France and Germany, raised the potential for a trade conflict between Brussels and Beijing, with China criticizing the tariffs as protectionist.

Additionally, in the third quarter of 2024, Chile’s exports of inorganic chemicals including lithium salts like Lithium Carbonate have overall declined, while in Q2, the situation was somewhat stable but due to the oversupply situation and weak demand conditions, the value of exports dropped by more than 2% in Q2 and more than 5% in Q3 2024.

Europe’s major consumer markets imported Lithium Carbonate at higher rates in the first half of the year, which influenced recent trade activities. The imports in the Netherlands were 1269.9MT in July, while in H1, it stood at a total of 4157MT. Germany’s imports stood at 697MT. Meanwhile, in H1, it stood at 2681.8MT. In Spain, August’s imports stood at 66.1 MT. These figures show that though the demand for Lithium Carbonate took a hit in the recent past, the optimism in the market players persists.

According to recent data, Lithium Carbonate imports from Chile saw a significant decline in August. EU’s imports decreased to 1194.4MT in August from 1642.8MT in July, a drop of 27%. Germany’s imports decreased to 130.4MT in August from 438.8MT in July, a decline of 70%. Netherlands’ imports decreased to 680MT in August from 1204MT in July, a drop of 43%.

The ChemAnalyst pricing team expects Lithium Carbonate prices to decrease in the upcoming week, primarily due to lower-cost imports.