Summary of Lithium Supply and Battery Raw Materials in 2024

The 2024 Lithium Supply and Battery Raw Materials Conference was held in Las Vegas from June 24th to 27th, attracting over 1100 industry participants to discuss key issues affecting the lithium market.

 Due to oversupply and weak demand, market sentiment is generally bearish. A large amount of lithium carbonate from Chile and spodumene from Australia have flooded the market, leading to oversupply. 

The increase in supply of African spodumene has intensified market pressure, and its price is more competitive than Australian supply.

During the conference, industry leaders emphasized the role of auctions in improving price transparency and market efficiency, marking a shift towards more mature trading methods. 

The attendees also discussed the constantly evolving pricing mechanism, shifting from fixed price contracts to contracts based on price evaluation, and introducing payment mechanisms in the pricing of spodumene.

The battery recycling industry is facing financial constraints and competitive pressure, with a focus on maximizing value and establishing partnerships. 

The important role of cobalt in battery recycling has also been emphasized, especially in the comparison between nickel manganese cobalt (NMC) batteries and lithium iron phosphate (LFP) batteries.

Overall, the meeting emphasized the need for continuous adaptation and cooperation throughout the entire value chain to cope with the complex and constantly changing landscape of the lithium market.

The lithium supply and battery raw materials conference hosted by Fastmarkets in Las Vegas from June 24th to 27th, 2024, attracted over 1100 industry participants.

 The main topics of discussion include price trends, supply dynamics, and constantly evolving market mechanisms. The following is a detailed report on the main insights of the meeting.

The bearish sentiment in the spot lithium market

Due to sustained weak demand and oversupply, the sentiment of most attendees tends to be bearish.

Supply surplus problem: A large amount of lithium carbonate from Chile and spodumene from Australia continue to flood the Chinese market, and the launch of new projects has exacerbated the supply surplus problem.

Price outlook: Many traders and producers expect prices to further decline.

Although some predict a brief price rebound in inventory replenishment demand before China's National Day in October, overall demand will remain weak.

African spodumene supply increases

The increase in supply of spodumene from Africa has intensified market pressure.

New projects: Major Chinese lithium producers such as Huayou Cobalt, Chengxin Lithium, Yahua Lithium, and Shenghe Resources have established integrated lithium mining projects in Zimbabwe, increasing supply.

Competitive pricing: African spodumene prices are more competitive, which has prompted some Chinese producers to purchase from Africa to reduce costs.

Auction enhances market transparency and efficiency

The executives of Albemarle and Pilbara Mining emphasized the role of auctions in improving market transparency and efficiency.

Price transparency: Auctions provide clearer visibility and trust in pricing for products at all levels of the supply chain.

Market maturity: Auctions help the lithium market evolve towards more efficient trading methods, similar to other commodity markets. They also support mitigating risks through price hedging.

The evolution of pricing mechanism

With the increase of auctions and new supply sources, the lithium market is gradually developing a strong pricing mechanism.

Transition from fixed prices: The market is shifting from long-term contracts with fixed prices to contracts based on price evaluations published by Price Reporting Agencies (PRAs).

The payment mechanism in the pricing of spodumene: A significant trend is the payment mechanism in the pricing of spodumene, whose value is linked to the price of lithium carbonate or lithium hydroxide. This transformation enhances the connection between raw materials and final products, promoting more effective hedging strategies.

Recently, the prices of lithium carbonate and lithium hydroxide have remained stable (April 2024 July 2024)

Challenges in the Battery Recycling Market

The battery recycling industry has faced significant challenges in the past year, and the current focus is on survival.

Financial constraints: Due to financial issues, the progress of major Western participants has been delayed, while lower battery metal prices and strong competition in Asia have affected conversion profits.

Maximizing Value: Companies like Battery Technology Corporation (ABTC) are offsetting low lithium and cobalt prices by selling copper streams at high prices.

Partnership: Collaboration and technological advancements are crucial for the survival of recycling companies in the current environment.

The role of cobalt in battery recycling

Due to its importance in battery recycling, cobalt received some support at the conference.

NMC and LFP batteries: NMC batteries are considered to have an advantage in recycling compared to LFP batteries, which have fewer recyclable materials.

 The recycled NMC output can be directly used for new batteries and other industries.

Price pressure: The low prices of key metals have affected the feasibility of new projects. Many Western operators may find it difficult to maintain profitability at current lithium prices.

The 2024 Lithium Supply and Battery Raw Materials Conference highlights significant challenges and opportunities in the lithium market. 

Although oversupply and weak demand are current concerns, the increased transparency and evolving pricing mechanisms through auctions provide a more mature and efficient path for the market. 

Battery recycling faces obstacles, but it remains a key component in the value chain, especially when the industry faces financial and technological challenges. 

As the market continues to develop, it is crucial for all stakeholders to closely monitor supply dynamics, pricing strategies, and collaborative efforts.