The strong demand for lithium chemicals and spodumene concentrate experienced during 2021 continued through the March 2022 quarter.

Electric Vehicle ("EV") sales for the March 2022 quarter were estimated at ~2 million units, up ~70% compared to the PCP. EV sales in China alone were estimated at ~1.1 million units during the March quarter, representing a 150% increase to the PCP. Demand for lithium carbonate in China remained strong during the March quarter in response to dominance of LFP battery formats (lithium, iron, phosphate) in the domestic market which represented more than 55% of battery chemistries.

Spot prices for lithium carbonate and hydroxide across all key geographies rallied to new records as limited uncommitted supply fell short of demand during the quarter. Spodumene concentrate spot prices also registered records during the quarter, approximately double the prices of the December quarter.

Contracted prices were gradually adjusted up to reflect tightening market conditions across the supply chain.

Estimated lithium chemical production in China during the March quarter was down by ~10% QoQ due to lower industrial activities arising from Chinese New Year celebrations and restricted supply of mineral feedstock. Spodumene concentrate volumes shipped to China from Australia were ~2.5% lower QoQ, whilst supply from local brine remained consistent with the previous quarter due to cold weather conditions.

The market dynamics resulting from an ongoing accelerated demand for lithium chemicals in China, in contrast to limited incremental supply, resulted in a supply deficit during the quarter which in turn pushed spot prices of lithium chemicals and spodumene concentrate to new records.

Further consolidation was observed in the lithium value chain during the March quarter with automakers announcing investments in downstream lithium chemicals.

Concerns regarding geopolitical risks continued to intensify in the battery supply chain as the Russia-Ukraine conflict escalated during the March quarter. New investments expanding battery materials capacity in North America and Europe were announced during the quarter and governments continued to reinforce the importance of developing local supply of critical battery materials including lithium.