US Lithium Carbonate Market Faces Weakness as Demand Declines and Global Influences Impact Prices

Texas, USA: The US lithium carbonate market has continued to demonstrate weakness in January 2024. The sector involved in manufacturing lithium-ion batteries is experiencing reduced demand, primarily because consumers in the market are being cautious and adopting a wait-and-see approach, influenced by decreasing prices. In addition to the demand aspect, manufacturing companies are also facing a decrease in profit margins, as the production costs of lithium carbonate have sharply declined. As of January 19, 2024, the assessed prices of lithium carbonate battery grade DDP USGC were USD 15,800/MT. However, few changes in the market dynamics were noted recently. Looking at the market changes, the price of lithium carbonate has become more stable this week, with some minor price adjustments.

Lithium-rich Chile is dealing with certain issues. Several hundred people in northern Chile staged a protest, blocking access to the Atacama salt flat, which is the world's largest lithium deposit. This region is the location where the local producer SQM and the American company Albemarle mine the metal. As a result, production slowed down due to the protest, and the active capacity dropped by 22.0%.

Moreover, the influence of the Chinese market on the rest of the lithium carbonate markets across the globe has remained strong. The US and European markets have followed a similar trend as in China. Since the start of the month, the lithium carbonate market in China has been operating weakly, and eventually, the downstream markets have suffered too. The downstream lithium hydroxide prices have also declined due to poor cost support from the lithium carbonate market, and additionally, the prices of raw material spodumene concrete have also followed a similar trend, thereby providing insufficient support. Apart from this, the high nickel materials were also following up slowly, and the market transactions were mainly for long-term orders, whereas a strong wait-and-see atmosphere prevailed in the consumer market.

According to the ChemAnalyst database, the lithium carbonate market in the US is anticipated to showcase stability in the upcoming weeks. Many companies are emphasizing stability in their pricing. On the supply side, domestic lithium salt manufacturers are maintaining stable production. Companies with strong support for prices are keeping their pricing attitudes mostly unchanged from before the holiday. Regarding demand, due to the decrease in spot prices of lithium carbonate and the anticipation of fewer orders, most positive electrode material companies are managing low raw material inventories. They are not interested in buying large quantities of lithium carbonate at high prices in downstream and terminal markets as of now; however, the demand outlook is presumed to exhibit stability.