Chinese carbonate prices had lifted above hydroxide in February, for the first time since April 2018.
However they softened in the first two weeks of June, with battery-grade lithium carbonate prices within China down 0.6% to RMB88,500 per tonne, as seasonal domestic supply from Qinghai brine projects came online, the price reporting and research agency said.
Hydroxide rose a further 2.7% to RMB93,500/t, impacted by demand for high nickel NCM cathodes.
Benchmark said hydroxide had typically sat above carbonate, because it was traditionally processed from carbonate and a conversion cost of US$1000-1500/t had historically been priced in.
"Changing feedstock supply, use dynamics and cathode evolution has seen this historic price relationship weakened in recent years," it said this month.
"Looking forward, the historic price relationship between hydroxide and carbonate may not be as clear cut as it has been in the past, primarily due to newer Chinese conversion facilities being able to produce hydroxide directly from the rapidly expanding spodumene feedstock market, therefore removing the some of the additional conversion cost by skipping the carbonate step and theoretically reducing the premium over carbonate."
Benchmark nevertheless expected prices for both hydroxide and carbonate to remain strong and said there was "a long way to go to meet the looming deficit becoming evident" amid surging battery demand.
