[minutes] Lithium salt prices will gradually rise and stabilize in the global new energy vehicle market.

SMM June 22nd: on June 22nd, Mei Wangqin, a new energy analyst at SMM, delivered a keynote speech on "Review and Future Prospect of phosphorus 2021 New Energy Industry" at an online live conference hosted by SMM. At present, with the continuous popularity of the new energy vehicle industry, the global sales of new energy passenger vehicles will continue to grow as high as 25% in the next 10 years. China's new energy vehicle market has gradually matured. Because of its convenience, prominent price advantage and intelligent advantage, the market acceptance of new energy vehicles has been gradually improved, and the driving force of industrial development is moving from policy-oriented to market-oriented. From the point of view of lithium salt, the growth rate of supply in the future is lower than that of demand, and as lithium mines are gradually put into production, prices will gradually rise and tend to stabilize. From the perspective of cobalt raw materials, cobalt resources are tight, the speed of removing cobalt is slow, and the overall price is increasing year by year.

I. Analysis and Forecast of the growth trend of New Energy vehicle Market

The global market for new energy vehicles continues to heat up, and the growth rate of ~ 25% will continue in the next decade.

As we all know, as one of the hottest topics in the past, the wave of new energy vehicles has swept the world. In the case of the outbreak of the epidemic last year, global sales of new energy vehicles can still grow against the trend. Based on market expectations, global sales of new energy passenger vehicles will continue to grow by as much as 25 per cent in the next 10 years and reach the level of 30 million vehicles by 2030. Well, from the perspective of sub-regional markets, China, Europe and the United States will become the three main driving markets.

China, for example, is typically policy + market-driven, and we can see that China is shifting from policy-oriented to market-oriented. In Europe, the overall development trend is similar to that of early China, which can be summed up as "carrot + stick", which refers to financial subsidies and tax breaks (such as Germany's EV exemption + subsidy of 4-65000 euros), while "big stick" refers to a strict carbon emissions regime that raises the greenhouse gas reduction target from 40 per cent to 60 per cent in 2030, otherwise it will be severely fined. The United States is a different trend from China and Europe, and it is more scientific and technological innovation led by Tesla to drive consumer preferences and trends.

China's new energy vehicles are gradually shifting from policy support to market-driven, and production is expected to maintain a high growth rate of 32% in the next five years, reaching ~ 6.1 million vehicles.

China's new energy vehicle market has gradually matured. Because of its convenience, prominent price advantage and intelligent advantage, the market acceptance of new energy vehicles has been gradually improved, and the driving force of industrial development is moving from policy-oriented to market-oriented.

Due to the pick-up of the end market, the installed capacity of power batteries will increase by 55% in 21 years, reaching 114GWh.

In terms of power batteries, since the fourth quarter of 20 years, due to the impact of the consumption growth rate of new energy vehicles, the installed capacity has increased significantly, while the installed capacity of iron and lithium has increased rapidly.

II. Analysis and Forecast of supply and demand structure and Price of Lithium Salt in China

Lithium carbonate has been in short supply since the end of 20 years, and the price has risen sharply. In the second quarter, the price began to accumulate, and the price began to fall slightly.

Starting from the third quarter of 2020, the demand for cathode materials increased obviously, and the marginal amount of lithium carbonate storage decreased gradually. until the end of the fourth quarter, the domestic supply even fell short of demand. From 21 years on, lithium salt enterprises began to scale up, and the market gradually appeared surplus. The price of lithium carbonate began to decline slightly.

The demand for high nickel at home and abroad has been increased, and the supply and demand structure of lithium hydroxide has been optimized.

In the first half of 2020, the domestic ternary demand for high nickel was insufficient, while the supply continued to grow, and lithium hydroxide continued to accumulate; in the second half of the year, the overseas demand for high nickel rose, and the supply and demand structure of lithium hydroxide was optimized; the demand for high nickel at home and abroad was high in the second quarter, and the production of high-end lithium hydroxide was insufficient, and inventory gradually decreased.

III. Global Cobalt Raw material supply and demand structure Analysis and Cobalt Price Forecast

Under the influence of the epidemic, raw material inventory is tight, and cobalt price fluctuates greatly.

In 2020, Q1 was affected by the epidemic, the demand for terminal power batteries decreased, the price of cobalt fell; the demand for Q3 new energy vehicles resumed, the demand for digital 3C exceeded expectations, the stock of superimposed raw materials was tight, and the price of cobalt rose. In 2021, Q1 domestic raw material inventory is tight, prices are up; Q2 procurement off-season is approaching, prices are weak.

Cobalt sulfate: H1 cobalt sulfate destorming rate slows down in 2021, and the price goes down.

Since September 2020, the supply of cobalt sulfate can not meet the demand for cobalt sulfate from ternary precursors and cobalt tetroxide. the removal of cobalt sulfate continues and the price goes up. In 2021, the decontamination rate of cobalt sulfate gradually slows down, and the price gradually weakens.

SMM battery materials research team

Mei Wangqin 021-51666759

Huo Yuan 021-51666898

Liu Xiaoyi 021-51666716

Yuan Ye 021-51595792