【CBC Weekly Review 】 Spodumene price weak operation

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Price Trends:
This week (2024.12.6-12.12), the weekly average price of Chinese lithium concentrate (Li2O: 6%–6.5%) CIF was $831.60 per ton, down 1.47% from last week. The mainstream price decreased from the weekend before (12.5) at $810-878 per ton to the weekend of this week (12.12) at $784-852 per ton.
This week (2024.12.6-12.12), the weekly average market price of Chinese lithium concentrate (chemical grade; Li2O: 6~6.5%) was 6,750 yuan per ton, down 0.75% from last week. The mainstream price fell from the weekend before (12.5) at 6,610-7,040 yuan per ton to the weekend of this week (12.12) at 6,540-6,960 yuan per ton.
Summary:
The market price of spodumene weakens this week. The issue of oversupply of lithium carbonate has not been resolved, which makes it difficult for lithium ore prices to sustain an upward trend. Moreover, domestic lithium salt manufacturers are reluctant to accept high-priced ore due to cost inversion. Currently, most traders engaged in the procurement of lithium ore are barely profitable and are mainly focused on digesting inventory. Salt lake enterprises still have profit margins, while some ore procurement companies are suffering significant losses and are shifting to contract processing or halting production. In a weak lithium carbonate market, although lithium salt plants are unwilling to sell at low prices, they have to accept the reality and can only participate in hedging to reduce the risk of price declines as much as possible. It is expected that the price of spodumene may continue to weaken and stabilize.
Market Forecast:
Although the current price of lithium carbonate has fallen to a low point, due to the overcapacity of the domestic lithium industry and abundant upstream supply, the price of spodumene remains under long-term pressure. The price pressure makes it difficult for domestic lithium ore suppliers to sell their goods. Industry insiders say that although prices have risen short-term, new production capacity is still being released. Therefore, it will take a long time to reach a reasonable market environment. Although the price of spodumene is strong in the short term, there is still downward pressure.
Long-term Forecast:
In the long term, on one hand, lithium battery materials should be used as basic materials for energy storage combined with new energy sources such as hydrogen and wind energy. On the other hand, from the perspective of policy trends, new energy vehicles are an important fulcrum for promoting domestic economic circulation. Therefore, lithium carbonate and lithium ore have irreplaceable rigid demand. Currently, traders in the ore mining and sales sector are gradually shifting to long-term contracts for large purchases, and lithium carbonate manufacturers are weeding out weaker small enterprises through competitive pressure on profits, thus gradually increasing industry barriers. It is expected that the price of spodumene will also gradually return to a relatively stable level with the development of the industrial chain.

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