According to the Commodity Market Analysis System of Shengyi Society, lithium carbonate fluctuated at a low level in November. As of November 26th, the average price of industrial grade lithium carbonate in China was 78600 yuan/ton, an increase of 2.34% from 76800 yuan/ton at the beginning of the month,; Battery grade lithium carbonate is priced at 81200 yuan/ton, up 2.27% from 79400 yuan/ton at the beginning of the month.

Lithium prices plummet, Australian lithium mines shut down or reduce operations

On November 13th, Mineral Resources Australia announced that after a strategic review, due to the long-term low price of spodumene concentrate, its lithium mining project Bald Hill will begin maintenance and upkeep from this week. Mining and mobile maintenance operations will cease from that day onwards, and the spodumene concentrate plant and accommodation village plan to suspend operations in early December 2024. Based on this change, the final batch of Bald Hill spodumene concentrate is expected to be sold in December, and the estimated shipment volume for fiscal year 2025 will be reduced from the previous 120000 to 145000 dry tons to 60000 dry tons.

On November 11th, Liontown, another lithium mining giant in Australia, announced a production reduction plan, lowering its ore production target for the end of fiscal year 2027 from 3 million tons per year to 2.8 million tons per year. It is expected to start mining ore in the fourth quarter of fiscal year 25.

Several Australian mines have previously announced production cuts or shutdowns

Starting from December 1st, the Ngungaju factory will be put under maintenance and the lithium concentrate production for the 2025 fiscal year will be reduced to 700000 to 740000 tons.

Amid the sustained low lithium prices, lithium mines in Australia have entered a state of large-scale production stoppage and reduction this year. Australia is currently the largest source of global lithium resource supply and also the largest source of lithium ore imports for China. According to data, Australian lithium mines account for 47% and 55% of global and Chinese lithium raw material supply, respectively.

The recent suspension of production has also affected the domestic price of lithium carbonate. Lithium carbonate, which has been continuously declining for nearly half a year, has recently experienced a fluctuating rebound, but the rebound is limited, fluctuating around 80000 yuan.

In terms of cost structure, the decline in lithium carbonate prices will lead to a bottoming out of lithium mica, spodumene, and salt lake lithium extraction costs. However, in the domestic market, lithium mica manufacturers with relatively high taste and mature smelting capabilities can reduce the cost of lithium carbonate to a level of 70000-80000 yuan/ton. If further reduction in production of Australian mineral spodumene leads to price increases, its production capacity may be supplemented by lithium mica.

Taking into account various factors, as the main source of domestic lithium carbonate supply, Australian mines have a significant impact on their production capacity supply. However, the spillover of production capacity structure caused by the rise in lithium prices will suppress the room for lithium price increase, and the possibility of a significant increase in lithium carbonate prices in the future is still limited.