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https://www.greencarcongress.com/2020/01/20200112-cru.html
. . . Lithium carbonate prices in China dropped between January and August 2019 by nearly 20% since the beginning of 2019 to RMB 65,000/t, equivalent to $9.25/kg LCE. Lithium hydroxide has fallen by 30% to RMB 74,500/t, according to CRU’s price assessments.
China is the world’s largest user of lithium, accounting for 57% of global demand in 2019, and is also the biggest supplier of lithium converted products. Many market players look to Chinese lithium spot prices as a bellwether of market health and therefore the continued decline of lithium prices in China has put mounting pressure on the global lithium market, CRU says.
CRU calculates that the Li-ion battery sector accounts for 60% of lithium demand in China, of which EV and portable electronics have the largest share. Portable electronics have long been the mainstay of lithium demand. With 4G handsets now representing 95% of domestic sales, market saturation has resulted in mobile phone sales through to July dropping by 5% year-to-date.
The real driver of lower lithium demand has been disappointing BEV uptake, according to CRU. Chinese EV sales through to July totalled 696,000 this year. Although this marks an impressive 41.5% y/y increase the rate is nonetheless lower than expected by the market.
There are two main reasons for this, according to CRU:
- Shrinking automotive sales: the accumulated auto sales in China have dropped by 11.5% in July based on official CAAM statistics. Many OEMs and dealers have engaged in huge marketing events for traditional cars and offered large discounts to consumers.
Sharply decreased subsidies for EV: China introduced its new subsidy policy for electric vehicle sales in late March 2019 which was much lower than expected, with EV subsidies declining by 50-55% in 2019 on average. . . .