Last year saw perhaps less exuberance in the lithium sector. The muted response to the IPOs of industry majors Ganfeng and Livent (ex-FMC) probably best exemplified the lull in excitement. Meanwhile, stocks of already traded lithium companies also had a painful time of it in 2018.
For lithium spot prices in the Chinese domestic market, 2018 saw only one direction – down. Rising domestic supply, EV subsidy changes, and destocking all combined to send prices for 99.5% lithium carbonate from RMB160,000/t at the start of 2018 to RMB77,500/t by the end of the year.
Yet conversely, average prices for seaborne material – largely sold on contract basis – seemingly bucked the trend, with realised prices for SQM and Albermarle increasing up to Q3 2018.
Poor performances on the supply side helped strengthen contact prices . While the year saw three new Australian spodumene mines – Altura, Pilbara, Alliance Minerals – commence commercial output, conversion capacity within China remains a bottleneck. Meanwhile, the big brine producers in Chile both had ramp-up issues: Albermarle with the still slow-moving La Negra II, and SQM with the delay of its carbonate expansion to 70 ktpa.
Last year, we also witnessed increased industry consolidation across the board. Traditional brine producers increased their exposure to hard rock spodumene operations, and vice versa. Chief among these were Tianqi Lithium buying a 23.77% stake in SQM for $4.07 billion, and Albermarle agreeing to take a 50% stake in Mineral Resources’ Wodgina operation for $1.15 billion.
For the rest of this article: http://www.mining.com/web/lithium-cobalt-look-2019/