After the 2025 Chinese New Year, both lithium ore and lithium carbonate prices declined to varying degrees. According to Mysteel data, as of February 26, the price of 6%Li spodumene concentrate was USD 875/tonne, down 1.1% from the first working day post the CNY holiday, while battery-grade lithium carbonate was priced at Yuan 75,900/tonne, down 1.9%.
Although the price fluctuations were small, the production cost of lithium carbonate was around Yuan 78,000-79,000/tonne based on the lithium ore cost of $880/tonne, incurring losses when lithium carbonate prices were below Yuan 76,000/tonne. Therefore, the inversion between production costs and profits has put operational pressure on producers.
Source: Mysteel
Currently, Australia is the core supplier of hard rock lithium, while the proportion of supply from Africa is gradually increasing. In 2024, China imported 3.579 million tonnes of spodumene from Australia, accounting for 64.3% of total imports, compared to 85.1% in 2021, based on data from the General Administration of Customs of the People's Republic of China (GACC). The supplementary role of African lithium ore in the spot market is becoming increasingly significant.
Source: GACC, Mysteel
On the supply side, the SC6 spodumene concentrate production from Australia's nine operational lithium mining projects reached 923,000 tonnes in 2024 Q4 (Mt Cattlin and Mt Holland's operating companies have not yet released financial reports), down 1.1% QoQ but up 9.2% YoY. This supply growth mainly came from improved efficiency at medium and small mines.
Major mining companies, such as Greenbushes under Talison Lithium and Pilgangoora under Pilbara Minerals, accounted for 60% of total supply, though there was a slight quarter-on-quarter decline in Q4 due to the usual period of technical upgrades and maintenance at large mines. The increase in supply mainly came from Liontown's Kathleen Valley and Mineral Resources' Wodgina project, with Kathleen Valley showing a remarkable 207.2% quarter-on-quarter growth in SC6 concentrate production.
As of Q4 2024, Australia's SC6 spodumene concentrate inventory totaled 272,000 tonnes, up 37.4% QoQ. The inventory growth was mainly driven by leading mines, with part of the increase attributed to sales strategies and port congestion in Q4 2024. It is expected that inventory growth will slow as lithium mining companies adjust their sales strategies and accelerate production line upgrades.
Source: Mysteel
Despite ample supply, lithium ore prices have remained inverted against salt prices. The main reasons include some lithium salt producers locking in profits through hedging, which encouraged stable procurement. For example, the GFEX lithium carbonate futures price once hit Yuan 87,000-88,000/tonne in November 2024, which allowed a profit of around Yuan 10,000/tonne when spodumene concentrate was priced at $800/tonne.
Meanwhile, major mining companies in Australia and Brazil have been selling through long-term contracts, while spot shipments are mainly from Africa including Zimbabwe and Nigeria. Notably, the adjustment of tax rates and ensuing customs system issues in Zimbabwe at the beginning of 2025 delayed the exports, which affected spot supply.
After lithium carbonate prices dropped, major mining companies chose to either keep prices high or take a wait-and-see approach, while international traders scaled back their involvement, which further restricted the flow of spot supplies.
Looking ahead, the lithium ore prices are expected to gradually decline, mainly due to the continued shipments from major overseas mines. According to Mysteel survey, Australia shipped a total of 515,000 tonnes of spodumene concentrate in January and February 2025, up 24.5% YoY.
Source: Mysteel
Additionally, African lithium ore is becoming an important supplementary source for the Chinese market, thanks to its higher economic efficiency. Previously, shipments from African mines were delayed due to Zimbabwe's tax reforms and the tensions in Nigeria. It is expected that these shipments will arrive at ports by the end of March. As a result, lithium ore prices are expected to gradually decline in the coming period.
Written by Cora Ji, jiruyan@mysteel.com
Edited by Aggie Hu, huchenying@mysteel.com
