A new era for commodities as sustained lithium price run marks onset of EV demand – Benchmark Minerals
Benchmark Mineral Intelligence
Prices of lithium carbonate, a key lithium ion battery raw material, have increased nearly 40% in the last 12 months as a wave of global electric vehicle (EV) production begins to have a sustained impact on the industry.
Benchmark Mineral Intelligence’s Lithium Carbonate South America (99%, FOB) price – a region which accounts for 68% of global lithium carbonate production – has increased from $11,500/tonne in June 2017 to a mid-point average of $15,750/tonne in Benchmark’s latest Lithium Price Assessment. (For full ranges see below).
“The lithium industry is facing a wall of electric vehicle demand,” explained Simon Moores, Managing Director, Benchmark Mineral Intelligence.
“Lithium prices have been high and sustained for many years now – something that those outside of the industry did not expect back in 2015. We have shifted from an industry being influenced by supply side problems to a demand driven story. Electric vehicles are now beginning to impact the lithium supply chain.”
“We have entered a new era for commodities,” Moores said.
Benchmark Mineral Intelligence produces the lithium industry’s reference price each month as it independently assesses 6 lithium carbonate grades, 4 lithium hydroxide and a spodumene feedstock grade.
Lithium hydroxide, another lithium chemical that is consumed in lithium ion battery cathodes, has risen 10% in the same time-period to $17,250/tonne.
China’s lithium prices
Within China, prices have recently fallen from highs of $24,750/tonne in March 2018 to $21,000/tonne for Benchmark Minerals’ Battery Grade Lithium Carbonate (EXW China). The equivalent prices for lithium hydroxide in China are up 5% on January 2018, at an average of $23,000/tonne.
China’s lithium chemical companies tend to trade on smaller volume contracts in what is a more volatile trading environment. New lithium chemical conversion capacity – critical to process the growing output of Australian spodumene – has been introduced this year which alongside weaker than expected demand growth, is resulting in softening prices.
But this is not the full picture.
“The shorter-term nature of lithium contracts in China means there has been more price volatility in the Chinese lithium industry in recent years. Nonetheless, lithium prices globally are still converging towards the higher China levels at the $17-21/kg range,” explained Andrew Miller, Senior Analyst at Benchmark Mineral Intelligence.
“The market is finely balanced right now. Unprecedented battery demand growth and a slower than anticipated supply response will keep the market tight for longer than many expect,” Miller added.
About Benchmark Mineral Intelligence
Benchmark Mineral Intelligence is a UK-based price assessment company specialising in the lithium ion battery supply chain. It is most famous for producing the lithium industry’s reference price every month to a lithium-specific methodology.
Benchmark assesses lithium prices through first-hand data collection from key contacts on both sides of the supply chain.
The proprietary prices published in Benchmark Mineral Intelligence’s monthly Lithium Price Assessment are used by those actively trading lithium such as: producers of lithium carbonate, hydroxide and spodumene, chemical and cathode manufacturers, lithium ion battery producers and EV makers.
For more information on how we collect our lithium prices, you can read this article: Plight of the PRA and how Benchmark became the lithium industry’s reference price, 10 June 2018) here.
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Meet our Team
The Benchmark World Tour 2018 will arrive in Asia and Australia in September.
From the 10th September onwards, we will be in Hong Kong, Seoul, Japan, Perth, Melbourne, and Sydney presenting the lithium ion supply chain in a series of private seminars. To attend for free, please apply here: http://www.benchmarkminerals.com/world-tour2018
You can also attend our annual industry conference, Cathodes 2018, part of Benchmark Minerals Week, 22-25 October, Newport Beach, CA here. https://www.benchmarkminerals.com/events/cathodes-2018/
Understanding Lithium Prices:
It is important to understand that there is no one lithium price but a selection of grades and price mechanisms produced by Benchmark that the industry uses.
The prices cited in this article are mid-points of the following price ranges:
• Lithium carbonate, FOB S. America: $14,500-$17,000/tonne
• Lithium hydroxide, FOB N. America: $16,500-$18,000/tonne
• Lithium carbonate, EXW China (Battery Grade): $20,000-$22,000/tonne
• Lithium hydroxide, EXW China: $21,000-$25,000/tonne
In addition to the 11 lithium grades we assess prices for, Benchmark also produces the following price mechanisms based on this proprietary data.
Lithium Weighted Average Price: a global average price for lithium carbonate and lithium hydroxide weighted by volumes traded.
Lithium Price Index: A pricing index calculated from a weighted average of global lithium chemical prices, based on the volumes traded in the market.
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