Lithium ore prices weak on oversupply

China's lithium ore prices dropped through November primarily due to stubbornly poor end-market demand.

Source: Mysteel

In detail, the prices of lithium carbonate dropped throughout the month as the end-market demand failed to gain momentum, even now. Extending bearish sentiment prompted the lithium ore traders to lower their offers, in addition to rising production overseas.

On the demand end, the lithium carbonate smelters suffered losses on low selling prices, and had to reduce the production for const control, which resulted in even weaker demand for lithium ore. As such, China's lithium ore market is increasingly oversupplied.

The average price of 6% spodumene concentrate under long-term orders was $1,964.17/tonne in November, a drop of 19.43% from the previous month, or $2,253/tonne after counting in the ocean freight of $30/tonne and the import tariff of 13%. This was equivalent to Yuan 129,000/tonne for lithium carbonate, excluding the processing charges.

In summary, domestic smelters relying outsourced lithium ore from Australia still suffered losses. Only those with in-house mines or relying on lithium ore from Africa were able to make profits.

Written by Aggie Hu, huchenying@mysteel.com