China’s lithium carbonate imports surged over 100% on year in July, prices surged 878% from a year ago

 

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China’s imports of lithium carbonate, a key material for producing lithium-ion batteries, reached 93.96 million tonnes in July, sliding 67% from the previous month, but surging 108% from a year earlier, according to China’s customs data.

The average price of imported lithium carbonate reached $62,498 per tonne last month, falling 3% from the prior month, but surging 878% from a year earlier, showed the data.

In April and May, custom clearance of lithium imports were affected by the Covid outbreaks, leading to a concentration of lithium carbonate imports in those months arriving in June, sending imports soaring that month, The Paper said in a report on Monday, citing Huaxi Securities.

Chile and Argentina are the main lithium suppliers for China last month, shipping 8,185 tonnes and 1,128 tonnes, respectively, in July, showed the customs data. The average price of China’s lithium carbonate imports from Chile in July was $67,466 per tonne, and Argentina was $27,022 per tonne

In China’s domestic market, the average price of battery-grade lithium carbonate was $469,523 per ton ($68,640 per ton) in July, essentially unchanged from June, according to Shanghai Metals Market (SMM). On August 22, battery-grade lithium carbonate was quoted at RMB 482,000 per ton in China, according to the SMM.

Current high lithium carbonate prices do not reflect true supply and demand, as most contracts are long-term and only a small fraction of those deals are sold at high spot prices, Cui Dongshu, secretary-general of the China Passenger Car Association, said in a report on Monday.

Factors including sellers’ reluctance to sell, hoarding and speculation by buyers and distributors led to market expectation of a shortage of lithium supply, Cui said.

On the other hand, the development of the new energy vehicle market has been stronger than expectations, deepening market expectation of a shortage of supply, triggering a continuous rise in lithium carbonate prices, according to Cui.

However, as the effect of the US Federal Reserve’s rate hikes becomes apparent, lithium prices are likely to remain between 470,000-500,000 yuan per tonne, unlikely to jump above 500,000 yuan per tonne, Cui said.