Lithium’s inventory upheaval confounds industry, hits prices
A surprise surge in lithium stockpile data — after a change in methodology — has confounded traders and weighed on prices, prompting some to call on authorities to step in.
Data released last week by SMM Information & Technology Co., leaning on a larger sample than previously, saw stockpiles jump to 175,000 tons. The previous figure stood at 78,800 tons. In response, prices for the most-active lithium carbonate contracts in China fell more than 14% across three days.
The lithium market has seen plenty of turmoil over recent years, but the sharp and unexpected jump in inventories raised fresh concerns about the true state of demand and about the challenges of predicting next steps for an opaque and still-developing market.
A dozen company officials, traders and analysts described an industry left baffled by the sudden jump, and fretting about reliable data. They all asked not to be named speaking on sensitive matters, but pointed to a petition circulating online demanding that relevant agencies investigate.
SMM said on Friday that its new method showed stockpiling among downstream cathode-material plants, while upstream smelters and battery plants showed destocking activities.
The revised method includes sampling from more manufacturers and will also result in changes to some previously published data, SMM said. It added that estimates are derived from public information, market communications and its internal data models.
One official at SMM said the company may have underestimated the impact of its inventory shift, but had begun internal compliance checks to examine the issues. He also asked not to be named as those discussions are not public.
SMM did not respond to messages requesting comment.
“If data and prices provided by some third-party pricing platforms fail to objectively reflect the real market levels, we will adopt more market-oriented and diversified pricing methods to ensure that product prices are fair and reasonable,” Ganfeng Lithium said in response to investors query on a stock exchange platform.
(By Annie Lee and Alfred Cang)
Lohum ships first lithium ore from Zimbabwe, starts overseas mining
Lohum said on Wednesday it had dispatched its first shipment of lithium ore from Zimbabwe, marking the start of its mining operations in the southern African country and making it the first domestic company to produce lithium from overseas assets.
The Indian producer of sustainable critical minerals has secured rights to 10 lithium mining blocks in Zimbabwe’s Matabeleland South Province covering about 1,100 hectares, with estimated deposits of 30 million-40 million tonnes of ore.
The assets are expected to support production of around 300,000 metric tonnes of lithium carbonate equivalent and carry an estimated value of about $7 billion at current prices.
The company also holds an option to acquire up to 90 adjacent mining blocks.
Lohum said the move expands its presence across the critical minerals value chain, complementing its existing refining, advanced manufacturing and recycling businesses.
Chief Executive Officer Rajat Verma said securing lithium supplies at the source would help reduce battery costs and strengthen India’s electric vehicle supply chain.
It also plans to build processing capabilities in Zimbabwe rather than exporting raw ore.
(Reporting by Urvi Dugar in Bengaluru and Neha Arora in Delhi; Editing by Ronojoy Mazumdar)
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