Ston, October 27th (Argus) - Elevra Lithium, headquartered in Australia, settled its spodumene sales during the period of July to September this year based on the new spot-linked pricing mechanism. This arrangement led the company to face a price decline since October. The management stated that this decline was mainly driven by market sentiment rather than the weakness of the physical market.
Through the business of North American Lithium (NAL) located in Quebec, the company sold a total of 58,134 tons of spodumene concentrate in July to September. The average transaction price for this quarter was $1,276 per ton (FOB), equivalent to $1,524 per ton (SC6). Compared with April to June, the transaction price increased by 39%, and the revenue also more than doubled, reaching $74 million.
Both batches of goods were sold through Mitsubishi as an agent. Elevra's Chief Financial Officer, Christian Cortes, stated that the company's reported FOB price has deducted its commission.
The final price is determined based on the average price of the month one month after the goods arrive at the unloading port. This new pricing mechanism replaces the previous lagging pricing method, which reflected the price data six months ago.
The company's goods in July arrived in September and will be priced based on the average price of October. According to the company, the goods at the end of August were still at sea and are expected to be settled in November.
Cortes said that the average freight price from Canada to China is approximately $75 per ton, but the current price is higher, ranging from $75 to $100 per ton. Chief Executive Lucas Dao stated that the freight disadvantage of Canadian raw materials is 50-60 US dollars per ton compared to Australian supply.
Cortes pointed out that customer demand remains stable, there are sufficient spot inquiries, and there are no signs of backlog. He attributed this weak situation to the lower-than-expected battery production data in China and concerns about the inventory of the industry chain. These concerns affected the contracts of the Guangzhou Futures Exchange, and subsequently "affected the trading behavior related to the exchange".
He said, "I believe that the supply side has not caused the rapid price decline we are currently seeing."
Elevra has been selling for at least eight months. Its two underwriting customers, LG Energy Solutions (LGES) and Mangrove Lithium, are purchasing as much as possible. LGES agreed in October last year to purchase 240,000 tons of spodumene in the next four years. Mangrove Lithium plans to purchase up to 144,000 tons per year for the proposed Canadian lithium salt plant.
The company stated that its NAL expansion project has now been launched, with an annual production capacity of 373,000 tons and a unit cost reduction of 150-160 US dollars per ton. He added that the new capacity is too small to change the market supply and demand fundamentals.
