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Some lithium prices are near all-time highs despite oversupply fears: analyst

https://stockhead.com.au/resources/some-lithium-prices-are-near-all-time-highs-despite-oversupply-fears-analyst/

18 hours ago | Reuben Adams

Despite bearish headlines about oversupply fears, lithium prices are increasing in many cases, according to new Roskill analysis.

“Lithium prices have shown a mixture of trends in 2018, depending on which price set you look at,” said Jose Lazuen, who’s responsible for Roskill’s electric vehicle, battery and downstream supply chain market analysis.

“While Chinese ‘spot’ or ‘internal’ prices for lithium carbonate have fallen back dramatically, they represent only a small portion of total lithium carbonate purchases,” Mr Lazuen told Stockhead.

“[Contracted carbonate prices] have been steadily increasing throughout 2018 and actually exceeded the China spot price for the first time in [the September quarter of] 2018.”

Most lithium — processed or not — is traded in long-term contracts between major producers and consumers, says Mr Lazuen.

It is rare to buy and sell lithium on the open market.

Roskill expects prices to increase steadily as contracts are renegotiated between major suppliers and consumers.

Western Australian lithium producer Galaxy Resources (ASX:GXY) agreed that domestic prices in China did not correlate with the overseas market conditions — with “rest of the world contract prices near to all-time highs”.