Chinese lithium prices rose 0.9% this week, the first increase in six weeks, on improving demand for electric vehicle (EV) batteries.
Spot prices of lithium carbonate climbed to 166,500 yuan (USD 22,786.68) per ton, from 165,000 yuan last week, though the price remains at around a six-month low.
“Battery makers, having received new orders from car makers, are now looking to replenish their lithium material,” said Vicky Zhao, a senior analyst at Fastmarkets.
She said prices could reach 200,000 yuan a ton by the end of the year.
Lithium prices in the world’s top consumer have plunged 67% so far this year due to rising supplies and waning demand from EV makers, but this month has seen an increase in EV purchases, ahead of the week-long National Day and Mid Autumn Festival holiday.
Production and sales of EVs reached 879,000 units and 904,000 units respectively in September, up 16.1% and 27.7% year-on-year, according to China Association of Automobile Manufacturers, which said the momentum should continue in October.
The better-than-expected September data and hopes of rising demand strengthened futures.
The January contract on the Guangzhou Futures Exchange rallied this week, closing at 170,250 yuan a ton on Friday, a near one-month high.
Prices are also being supported by lower production, after some producers reduced output because of the recent drop in prices.
China’s lithium carbonate output slid 8% on-month to 41,248 tons in September, data by information provider Shanghai Metals Market showed.
SMM expects October output to decline further to 36,457 tons.
Some producers are likely to resume their production once the market improves, however, said analyst Zhao.
(USD 1 = 7.3069 Chinese yuan renminbi)
