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Lithium prices surge to fresh highs

The rapidly growing electric vehicle sector is pushing lithium prices to fresh highs and propelling demand for graphite.
Lithium prices surge to fresh highs Lithium prices surge to fresh highs Lithium prices surge to fresh highs Lithium prices surge to fresh highs Lithium prices surge to fresh highs

Image: Unsplash.com/Kompan Electric

Staff reporter

Price reporting and research agency Benchmark Mineral Intelligence said in its mid-October update EXW China lithium hydroxide was approaching US$30,000 per tonne, well above the 2018 peak of $25,000/t.

It gained 16.3% in the past fortnight, up almost 253% year-to-date, to an average RMB183,250/t ($28,400/t).

Meanwhile battery-grade carbonate EXW China rose 15.6% over the last two weeks to an average RMB185,000/t ($28,675/t), representing a year-to-date gain of 322%, according to Benchmark.

Strong carbonate demand from cathode manufacturers was keeping the price margin between the chemicals narrow, the agency said.

"Benchmark expects continued volatility in the price relationship between carbonate and hydroxide due to flexibility to interchange between carbonate and hydroxide production at newer conversion facilities in China," it said.

In spodumene, record high spot transactions were likely to incentivise a strong upward revision of contract prices in the fourth quarter, Benchmark has said, a point also made by Pilbara Minerals MD and CEO Ken Brinsden at The Boom in a Room in Western Australia on Friday.

 ource enchmark ineral ntelligence Source: Benchmark Mineral Intelligence

Benchmark also said LFP batteries (lithium-ion batteries which use phosphate as a cathode material) accounted for a 58.3% market share of Chinese cell production in September 2021, up 252% year-on-year.

"While debate persists around cathode chemistries, with LFP cathodes gaining ground in China in recent months at the expense of NCM cathodes, these various lithium-ion battery chemistries are all utilising graphite anodes," Fastmarkets Metal Bulletin Research principal consultant Amy Bennett noted.

"In the coming years, exponential growth from the EV sector will propel the industry's graphite requirement far above demand from the traditional consuming sectors, including the refractory industry, which is now the largest graphite-consuming sector."

She said the challenge for the graphite sector centred on the pros and cons of natural versus synthetic graphite.

Natural graphite enjoyed a cost advantage over the "power intensive and environmentally unfriendly" synthetic version, Bennett said, but currently lagged in the key areas of performance and consistency.

She expected both to remain critical materials for anodes in the EV battery industry, and said the ability for supply to rise with demand would help keep prices "less volatile than in other battery raw material markets and will protect the industry from substitution by competing anode technologies in the longer term".