an excerpt from a recent Lithium article. Is spodumene to become...

an excerpt from a recent Lithium article. Is spodumene to become the preferred feedstock for BG Lithium?

Additionally, we note that half of Orocobre’s sales come from technical-grade lithium carbonate, which is currently purchased as a feedstock by lithium hydroxide producers in China. During Orocobre’s conference call, management said the weakness in pricing was coming from the technical-grade product as a result of lower demand from lithium hydroxide producers, while also stating that battery-grade lithium carbonate prices were flat.In our view, lower technical-grade lithium carbonate prices are an indication of an evolving lithium hydroxide market. As spodumene production ramps up in Australia, lithium hydroxide can be made at a lower cost using high-grade spodumene as a feedstock over technical-grade lithium carbonate. As such, we expect prices for technical-grade lithium carbonate to fall to a level that would make lithium hydroxide production costs equivalent to those associated with the use of spodumene feedstock. We estimate this at $10,000 per metric ton.Seth Goldstein, CFA does not own shares in any of the securities mentioned above. Find out about Morningstar's editorial policies.