Lithium carbonate price rose more than 6%! Another lithium mining company announces production cuts. Can the balance of the lithium market improve as production capacity is cleared?

SMM News on February 28: Since February 21, lithium carbonate futures price has been stimulated by rumors such as "Yichun area has reappeared environmental protection issues or restricted the start of operations of companies that cannot properly handle lithium slag", driving lithium carbonate futures price to hit the daily limit. After that, lithium carbonate futures price swept away the previous decline and started a rebound. As of February 28, lithium carbonate has recorded six consecutive gains. On February 28, the main price of lithium carbonate rose by more than 6%, once again breaking through the 11,000 yuan/ton mark. However, in the end, the price of lithium carbonate futures price did not stabilize at 11,000 yuan/ton. As of the close of the day, the main price of lithium carbonate was reported at 10,800 yuan/ton with an increase of 3.45%.

As we all know, lithium prices fell significantly in 2023. Domestic lithium prices dropped from 512,000 yuan/ton at the end of 2022 to 96,900 yuan/ton at the end of 2023, an annual decline of as high as 81.07%. On the mining side, the spodumene concentrate (CIF China) index also dropped from US$5,505/ton at the end of 2022 to US$1,315/ton at the end of 2023, a drop of 76.11%.

The decline in overseas lithium prices is also clearly reflected in the sales price of mine lithium concentrates. Taking the Pilbara, known as the "lithium price bell", as an example, the single ton sales price of its SC5.3% grade spodumene will start from 2023. The price in the first quarter dropped from US$4,840/ton to US$1,113/ton in the fourth quarter of 2023, a decrease of 77%.

After the continuous sharp decline in lithium carbonate prices in 2023, it has gradually approached the main cost range of Australian mines. Among the eight Australian mines, the two with higher costs have begun to respond.