China's LCO prices averaged Yuan 295,000/tonne as of July 25, up 3.5% month-on-month (MoM). The market players, however, are increasingly bearish on LCO prices at present considering persistently falling lithium carbonate prices, despite relatively firm Co3O4 cost.
Source: Mysteel
"LCO prices are vulnerable to declines as the players refuse to purchase high-priced Co3O4 when the demand growth is insignificant" suggested by a LCO manufacturer.
Specifically, the demand side is currently plagued by the seasonal low. Most mid-to-small scale manufacturers received few new orders as the electronics sector failed to hold up the entire LCO market, apart from the top-tier ones which relied on long-term orders.
On the other hand, the current LCO prices put the downstream players on the sideline especially when they generally held a bearish attitude and awaited further price drops.
Mysteel believes that with the anticipated drop of mobile phone shipment through July, LCO prices will find them in lack of support. Nevertheless, the demand is expected to pivot in the fourth quarter when end-market players stockpile for the Double Eleven online shopping festival.
Source: Mysteel
Written by Aggie Hu, huchenying@mysteel.com
