[ferro-alloys.com]Oversupply in China has seen lithium prices drop precipitously this year with carbonate now selling for nearly half than during the first quarter.

The Benchmark Mineral Intelligence price assessment released today shows domestic Chinese lithium carbonate of battery grade falling to an average $13,000 per tonne in August, down 47% on the first quarter and at levels last seen in 2015.

Benchmark anticipates more weakness ahead due to the gradual introduction of new spodumene supplies from Western Australia, but the battery minerals research firm offers some consolation saying "decreases are likely to slow as prices approach cost levels for higher-cost converters in China."

Free-on-board cargoes from South America are now worth more than ex-works consignments inside China, but Benchmark warns that with no rebound in sight for Chinese prices, producers elsewhere would likely have to settle second half contracts at lower prices. Export prices in Asia at $20,000 a tonne in August are now at their lowest since July last year.

Falling prices have claimed their first high profile victim with Desert Lion Energy announcing on Friday that it has ceased all operations at its hard-rock property in Namibia. The Toronto-listed company announced it's reassessing its strategy and has also commenced negotiations to reprice the off-take agreement with its Chinese partner.

Desert Lion Energy began production of lithium concentrate from stockpiled material at its Helikon and Rubicon property in central Namibia in December 2017 at an annualized rate of roughly 5,250 tonnes of lithium carbonate equivalent. According to the company there was approximately 700,000 tonnes of material and 100,000 tonnes of fines on the site.

Desert Lion Energy's phase 2 expansion envisages a 20,000 tonne per year operation based on a maiden resource and preliminary economic assessment scheduled to be published before the end of the month.

The deposit was first discovered in 1927 and mined for among others, beryl and tantalum, from the 1950s through the 1990s.

• [Editor:王可]