Albemarle joins spodumene auctions

Company News

by Glenn Dyer

Albemarle, the world's largest producer of lithium for electric vehicle batteries, has decided to join rival Pilbara Minerals and start auctioning its supplies of Australian-sourced spodumene, a key raw material for lithium metal.

Albemarle announced on Wednesday that it will commence auctioning off its key products on March 26, beginning with a 10,000-tonne parcel of the ore to be put up for bid via confidential offers, following the precedent set by Pilbara Minerals in the past.

The company stated it will hold several auctions to sell supplies of the metal as part of a push to boost market transparency and to establish pricing levels for investors.

This move mirrors Pilbara's approach, which is expected to resume its regular spodumene auctions next week, more than a year after they were abandoned during the great 2022 lithium boom.

Traditionally, lithium or its ores such as spodumene have been sold on long-term contracts by Albemarle, Pilbara, and other producers at price levels that are kept secret. Lithium carbonate is typically derived from brine, primarily sourced from countries like Chile and Argentina.

Pilbara previously ran a series of spodumene auctions through its BMX (Battery Material Exchange) platform but was overtaken during the great boom when prices for key metal types peaked above $US80,000 a tonne in November 2022. Prices are now more than 70% below that level.

The Shanghai Metal Market reports that hydroxide is selling for around 97,000 yuan or $US13,746 a tonne (with VAT).

While benchmark prices are published by various groups such as Fastmarkets, MySteel, Shanghai Metal Exchange, and Benchmark Mineral Intelligence, a truly transparent and easily discoverable market price has been lacking, unlike iron ore prices and other metal prices on exchanges like SGX in Singapore, Dalian Commodity Exchange in China, Comex in the US, or LME in London.

Despite the recent emergence of lithium trading by CME Group, volumes on those contracts are overshadowed by contracts and investor/trader interest for copper, gold, and other metals and commodities. ICE and Platts are two other pricing exchanges for oil, gas, and coal.

Albemarle is collaborating with London Metal Exchange partner Metalshub to run several auctions for lithium supplies, enabling potential customers to state their considered appropriate price.

The first auction, scheduled for March 26, will see Albemarle offering 10,000 tonnes of chemical-grade spodumene concentrate, sourced from the company's hard rock mines in Australia. The auction will be conducted in English and Mandarin, using the Chinese Yuan as currency, acknowledging the importance of Chinese demand in the renewables business, and bids will remain confidential.

Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

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