The company said this week the lithium market was seeing "maturing seasonality" in pricing, and changes to Chinese government subsidies for electric vehicles had led to destocking of certain lithium products. Prices for lithium in China have generally been higher than in other markets in recent years, and Galaxy said the recent slides were a sign of "convergence" with lithium prices in other parts of the world. "Rest of world pricing continued to grow to record levels throughout the quarter demonstrating the robust and maturing nature of the current market for lithium products," said the company in a statement. The convergence theory may explain why rival lithium producers that sell their product into non-China markets have reported rising prices in recent weeks. ASX listed Orocobre sells to a range of nations across Europe, North America and South-East Asia, and it recently reported sequentially higher prices in all four quarters of fiscal 2018. Aside from geography, lithium prices also differ according to product grade and the level of beneficiation, and Canaccord Genuity analyst Reg Spencer said investors should be wary of judging the entire lithium sector on movements for one particular type of lithium. "There are hundreds of different (lithium) products all at different specifications and they all sell at different pricing, unfortunately the equity market tries to simplify what is a rather complex supply chain and rapidly evolving sector into one number," he said. Mr Spencer said while daily market or "spot" prices for lithium in China had fallen, prices for lithium supply on longer terms had been more robust. "If you look at non-China contract prices they are still trending up," he said. Mr Spencer said there had been seasonality in Chinese lithium prices in recent years, with the six months to December 31 tending to be stronger than the first half of each year. The fall in Chinese lithium prices comes after such prices quadrupled over the past four years, and many analysts, including UBS, predicted earlier this year that lithium prices would peak in 2018. Chinese prices are most relevant to Australia's hard rock lithium producers, who typically produce lithium-rich spodumene concentrate and sell it to China. Aside from Galaxy, the biggest shareholder in the Greenbushes mine, Tianqi also sells a lot of its Australian lithium products into China, while Pilbara Minerals is also scheduled to sell some of its product into China. Spodumene concentrate is also being produced at Tawana's Bald Hills mine and the Mt Marion mine that counts Neometals and Mineral Resources Limited among its owners. Mr Spencer said the three months to June 30 had been a good period for Galaxy on an operational level, with the company producing and selling more spodumene concentrate in the period. The company produced a higher grade product than in the March quarter and received higher margins on each tonne of concentrate sold. "There were some material improvements in performance across all the key operating parameters which is good to see because the March quarter performance was a little disappointing," said Mr Spencer.
Prices for lithium carbonate sold into China fell 18% in three months to the end of June , according to Chinese lithium exporter Galaxy Resources , the second straight quarter of declines. The Australian price for lithium hydroxide, which is increasingly preferred by the manufacturers of batteries for electric vehicles, fell by 4% in the period, Galaxy Resources said. Chinese prices for lithium carbonate and lithium hydroxide fell by 18% and 4% respectively in Q1 .