US Lithium Carbonate Prices on Rise, Political Shifts and Supply Shortage Draws Bullish Outlook

Texas, USA: The US Lithium Carbonate prices have been on an upward trend in the recent weeks due to multiple factors. Initial reactions to the US election result were mixed, but overall, they appeared negative for the lithium and spodumene industries. According to sources, Trump’s policies are expected to prioritize traditional energy sources like oil, coal, and gas, and given his stance against renewable energy, outcome is anticipated to be bearish for the markets.

On the supply side, spodumene prices have been impacted by a recent surge in demand for Lithium Carbonate, largely driven by Chinese lithium producers looking to replenish their stocks. Many Chinese Lithium Carbonate producers had been operating based on orders from previous months due to weak demand and narrow margins, so their inventories are now quite low. Expectations for cathode production in China for November have been revised upwards, which has further boosted Lithium Carbonate demand, and consequently, the need for spodumene, sources noted.

The major exporter of Lithium Carbonate, Chile, the ongoing delay in implementing reforms to streamline mining permit approvals is becoming a major obstacle for Chile's mining industry. As the world's leading copper producer and the second-largest lithium producer, Chile is facing regulatory challenges that many in the mining sector believe are hindering project development. These delays come at a critical time when demand for copper and Lithium Carbonate is rising, driven by the global shift toward clean energy technologies. Without faster permitting processes, Chile risks losing investment opportunities and could face delays in developing new projects crucial for meeting both domestic and global demand for these essential minerals including Lithium Carbonate.

Additionally, in October, a trade surplus of USD 1.4 billion was recorded for Chile, significantly higher than the USD 0.7 billion surplus from the previous year. Exports grew by 10.1% year-on-year, up from 8.7% in September. However, lithium exports saw a sharp 64% YoY decline, primarily due to lower prices, which has also contributed to disappointing fiscal revenue.

Furthermore, freight rates have also noted an incline in the recent weeks which also influences Lithium Carbonate prices. Trump's recent victory in the U.S. presidential election may start influencing the ocean freight market even before the ceremony in January. Tariff plans could trigger a rise in ocean freight demand and rates, starting immediately, with these trends potentially intensifying once the tariffs are officially announced. The root cause of these elevated rates across the container market is the ongoing Red Sea crisis, which continues to absorb capacity. However, other factors specific to the North American market could be contributing to sustained pressure on rates compared to other trade lanes.

All of this combined has put pressure on the Lithium Carbonate market, providing upward pressure to the prices. The latest assessed prices of Lithium Carbonate Battery Grade DDP USGC (USA) were USD 12000/MT in the week ending on 8th November 2024.

As per the ChemAnalyst database, the prices of Lithium Carbonate are anticipated to remain elevated due to influx of expensive goods and further improvement in consumer demand.