Latest Update in the SMM Lithium Market

SK On signed a three-year agreement with POSCO Pilbara Lithium Solution to secure up to 15,000 tons of domestically produced lithium hydroxide.

The lithium market has been experiencing a tumultuous year, with prices continuing their downward spiral. In 2024, the trajectory of lithium carbonate prices has been a subject of concern for investors and industry players alike. The question on everyone's mind is: where will the bottom line be for lithium prices?

SHANGHAI, Jul 4 (SMM) – Last week saw a marginal decrease in the price of lithium hydroxide, trailing the price change of lithium carbonate.

Piedmont Lithium announced a significant workforce reduction of 27% to curb costs, with plans to save around $10 million annually on 6 February.

Abigail Ross Hopper, CEO of the USITC, said “The United States’ ability to lead the global clean energy transition and improve grid reliability depends on how quickly we expand domestic production and deploy the lithium-ion battery energy storage technology.”

Lithium carbonate dropped by 81.07%.

In the US dollar continued to fall and metal prices rose, with lithium carbonate increasing by 3.39% and European shipping futures falling by 4.88%. The decline of the US dollar led to a rise in metal futures, with Shanghai zinc, aluminum, and lead prices increasing. Additionally, black metal products and LME metals saw an increase in prices. European shipping futures continued to fall, and there are concerns about the supply of ferro-nickel raw materials for stainless steel. The overall resumption of work in the lithium carbonate market has been slow after the Chinese New Year, with market demand expected to gradually warm up in the second quarter. The US dollar index continued to fall, with expectations for a rate cut by the Federal Reserve in March decreasing. US and Brent oil prices rose, with the focus on OPEC's production policies for the next quarter in early March. The recent geopolitical tensions and new sanctions on Russia have also impacted the oil market.

The "January Red" of the auto market has seen a sharp drop in lithium prices, reducing costs for car companies. Despite fierce competition, BYD continues to lead among new energy car companies. Other new forces such as NIO, Leap Motor, and Xpeng are also performing well. The car price war, which started in 2023, is continuing after the Chinese New Year holiday, with companies like Tesla, Lynk & Co, and Volkswagen offering discounts. The decline in lithium prices has provided space for overall cost reductions for car companies. As the penetration rate of new energy vehicles in the market increases, the traditional fuel car market is shrinking, leading to more intense price competition. The China Passenger Car Association expects the price war to continue throughout the year.

Without noticing it, nearly half of 2024 has passed. Looking back at the lithium carbonate market since the beginning of the year has been tumultuous. Since the beginning of the year, the price of battery-grade lithium carbonate has risen from 96,900 RMB/ton to a high of 113,000 RMB/ton, and then experienced a downward trend in recent days after nearly two months of market fluctuations.