Welcomes Further Lithium Product Price Increases
Perth, May 16, 2012 AEST (ABN Newswire) - Galaxy Resources Limited (
ASX:GXY) welcomes the announcement by Rockwood Holdings Inc's. (NYSE:ROC) lithium division Rockwood Lithium ("Rockwood") regarding its decision to lift global lithium salts prices by US$1,000 per metric tonne.
In a statement, Rockwood (formerly Chemetall Lithium) said all salt prices would be lifted, especially lithium carbonate and lithium hydroxide, effective 01 July 2012.
Analysts First Analysis Securities Corporation said it estimated US$1000/tonne would equate to an approximate 22% increase in prices, based on a basket of lithium commodity products, and with some variations on each product.
"We believe this [price increase] suggests relatively tight supply and demand in the lithium industry, which is reasonable considering FMC remains in the midst of a slightly disruptive capacity expansion and SQM recently indicated its capacity utilization had improved. We expect FMC will follow with a price increase of its own; SQM may or may not announce an increase, but we would be surprised if it didn't play along, as it appears to have since the mid-2011 increases from ROC and FMC." - First Analysis Securities Corp - Research Note 14 May 2012.
It is the second time Rockwood has hiked lithium salt product prices in as many years after announcing a 20% increase in prices in June 2011.
Rockwood is one of the world's largest manufacturers and suppliers of lithium-based compounds and a global price setter in the lithium market. Rockwood added the price increases would allow it to fund investment projects and expansion plans and cited the electric vehicle market as a future growth area for lithium products.
Galaxy Resources Managing Director, Iggy Tan, said it was an encouraging sign for the potential prices the Company will be able to receive for output from its wholly-owned Jiangsu Lithium Carbonate Plant (Jiangsu Plant) in China.
Galaxy commenced operations at the Jiangsu Plant in April 2012, which will produce 17,000 tonne per annum of battery (high purity) grade lithium carbonate at full capacity.
About Galaxy Resources Limited
Galaxy Resources Limited (ASX:GXY) (OTCMKTS:GALXF) is an international S&P / ASX 200 Index company with lithium production facilities, hard rock mines and brine assets in Australia, Canada and Argentina. It wholly owns and operates the Mt Cattlin mine in Ravensthorpe Western Australia, which is currently producing spodumene and tantalum concentrate, and the James Bay lithium pegmatite project in Quebec, Canada.
Galaxy is advancing plans to develop the Sal de Vida lithium and potash brine project in Argentina situated in the lithium triangle (where Chile, Argentina and Bolivia meet), which is currently the source of 60% of global lithium production. Sal de Vida has excellent potential as a low cost brine-based lithium carbonate production facility.
Lithium compounds are used in the manufacture of ceramics, glass, and consumer electronics and are an essential cathode material for long life lithium-ion batteries used in hybrid and electric vehicles, as well as mass energy storage systems. Galaxy is bullish about the global lithium demand outlook and is aiming to become a major producer of lithium products.
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