Global lithium market sees surge in bidding activity after demand lull

The global lithium market saw a surge in bidding activity in the week to Feb. 21, especially in China, after a period of stagnant demand in the fourth quarter of 2024 and early 2025, market participants said.

Battery-grade lithium carbonate prices traded in a narrow range of Yuan 70,000-85,000/mt in Q4, according to data from Platts, part of S&P Global Commodity Insights. This rangebound movement carried over into 2025, though there has been an uptick in bidding events following the Lunar New Year holidays.

Some participants said this rise in bidding activity might be a double-edged sword -- offering transparency while introducing near-term price volatility.

Sluggish demand

The Chinese domestic and seaborne lithium markets have experienced sluggish demand from traders and downstream consumers since late 2024.

Some market participants said downstream order levels for March were still unclear, though others said they see a slight growth in levels for lithium-iron-phosphate (LFP) batteries.

Market participants in the Chinese domestic market were largely pessimistic amid expectations of further downward pressure on lithium prices due to expectations of increasing supply and limited downstream demand.

Platts, part of S&P Global Commodity Insights, assessed battery-grade lithium carbonate at Yuan 76,000/mt on a DDP China basis Feb. 24, unchanged day over day and week over week.

Rise in bidding activity

Recently, lithium refiners and miners have been more active in conducting bids. There were four bids in the week to Feb. 21, three for battery-grade lithium carbonate and one for lithium spodumene concentrate, after a period of demand lull.

China's Yichun Mining closed a battery-grade lithium carbonate tender for 120 mt at Yuan 75,800/mt on Feb. 18, market sources said. The battery-grade lithium carbonate was produced by Jiangxi Jiuling Lithium.

Thereafter, on Feb. 19, US company Albemarle concluded a tender for 200 mt of battery-grade lithium carbonate using Greenbushes spodumene refined by Yongshan Lithium, China, at Yuan 75,932/mt EXW duty paid non-bonded warehouse.

Additionally, on Feb. 20, China's Tianqi Lithium Corp. concluded a battery-grade lithium carbonate tender for 60 mt at Yuan 76,540/mt EXW Sichuan, China.

Upstream, Albemarle's tender for 15,934 mt of SC5.58 lithium spodumene from Wodgina concluded at Yuan 6,758/mt FCA Zhenjiang. Market participants said the price normalized to around $880/mt considering the customs clearance fee of around Yuan 20-50/mt.

Platts assessed spodumene concentrate with 6% lithium oxide content at $850/mt FOB Australia Feb. 24, unchanged day over day but down $5/mt week over week. The 0.1% spodumene concentrate differential, reflecting the value of each 0.1% of lithium oxide for spodumene grade within a 5.5%-6% range, was assessed at $14.17/mt FOB Australia.

Market reaction

The overall market reaction to these tenders has been cautious optimism. Some market participants said there was the potential benefit of price discovery as long-term contract prices diverge from spot market realities, while others expressed concerns about the risk of inflated prices amid speculative buying rather than being driven by actual demand recovery.

"It sends a positive signal to the market, but we must be cautious that some may use this opportunity to drive prices higher," a source from Tianqi Lithium said after completing a tender on Jan. 10.

Some participants, particularly in the Australian mining sector, said the tender results aligned with current spot market levels. "The tender price is reflective of the market," one Australian miner said.

However, a few traders expressed reservations about the high prices, suggesting that downstream markets might struggle to absorb such costs. "I think this price is too high; [the ]downstream [market] can't digest it," a trader said. "Bidding events are awarded to the highest bidder," said another trader, adding that "one buyer willing to submit high bids might not necessarily be reflective of the broader market."

Meanwhile, many converters continue to rely on long-term contracts as their primary sales strategy. "We're using tenders to test the market sentiment," Tianqi's source said. "The concluded price was higher than long-term contract prices, so it was a good result." Others, like Ganfeng Lithium, are considering participating in future tenders, but will start with smaller volumes. "We might begin with less than 100 mt and eventually scale up to several hundred tons," a spokesperson from Ganfeng said.

Despite the interest, some companies remain hesitant to embrace tenders fully. "We're not joining the tenders but will be paying attention," one Chinese converter said. For others, like a Chinese lithium converter participating in spodumene tenders, low bids have been placed with little expectation of success.

"We don't have the ability to put out a price [for the tender]; let's not struggle for nothing," a Chinese lithium converter said in response to one of the spodumene tenders.

Road ahead

With bidding activities on the rise, questions persist about the long-term sustainability of this model. While tenders can introduce market transparency, sources said market sentiment may be swayed, potentially leading to short-term price volatility, which could unsettle the broader industry.

As more market participants engage in these tenders, the next few months could determine whether tenders become a permanent fixture of the lithium market or remain a temporary tool for price discovery.