Core point of view
The tight balance between supply and demand in the lithium industry continues, and lithium prices are expected to remain strong.
On the supply side, the new capacity of global lithium resources is limited in the short term, and the supply shortage has been basically determined, while on the demand side, the downstream demand represented by new energy vehicles is accelerating the release. According to our estimates, the global lithium supply and demand balance is expected to reach + 5.4,1.0,2.3 and + 53000 tons respectively from 2020 to 2023. LCE,2021-2022 will continue to maintain a tight balance. Lithium prices are expected to continue to strengthen, and lithium mining enterprises are expected to fully benefit. The main beneficiaries include Ganfeng Lithium Industry, Tianqi Lithium Industry, Yongxing Materials, Shengxin Lithium Energy, Salt Lake shares, Koda Manufacturing, Tibet Everest and so on.
Supply side: short-term increment is limited, continue to continue the tense situation
Western Australia lithium mine with the continuous clearance of production capacity, there are only 4 mines left, the new production capacity is limited in the short term, and the supply increment will mainly be built capacity. At the same time, after the planned expansion of salt lakes in South America has been postponed, although there will be a certain scale of production capacity in the future, it is expected to be released centrally from 2023. In addition, China is speeding up the pace of lithium resources development, salt lake, spodumene, lithium mica routes blossom, production capacity growth is also relatively fast, but due to the small base, the overall increment is also relatively limited. Therefore, on the whole, the increase of global lithium supply is relatively small in the next 1-2 years, and the supply tension has been basically determined. From 2020 to 2023, the global lithium supply is expected to reach 42.7,53.1,68.3 and 968000 tons of LCE,CAGR, respectively, reaching 31.4%.
Demand side: the release of demand is accelerated, and the growth attribute is highlighted.
The trend of global electrification is accelerating, and the market penetration of new energy vehicles in major countries or regions such as China, Europe and the United States are all increasing. At the same time, the demand for energy storage batteries is expected to benefit from the rapid growth of power energy storage and communication energy storage. In addition, 3C battery will also usher in the spring of development with the gradual application of 5G technology. Overall, the downstream demand for lithium resources is accelerating the release, and the industry growth attribute is also increasingly prominent. It is estimated that the global lithium demand from 2020 to 2023 will reach 36.2,50.4,68.4 and 889000 tons of LCE,CAGR, respectively.
Supply and demand docking: from 2021 to 2022, the supply and demand of the industry continues to be tight, and lithium prices are easy to rise but difficult to fall.
Although the latest quoted price of battery-grade lithium carbonate has reached more than 100000 yuan / ton, the bottom has more than doubled, but according to our calculations, it is expected that the tight situation of supply and demand in the global lithium industry from 2021 to 2022 is difficult to change, and lithium ore is easy to rise and fall under the rigid gap. In order to judge the fluctuation range of lithium price, we continue to draw the cost curve of lithium concentrate from the supply side. It is found that the complete cost of lithium ore at the rightmost end of the cost curve has reached 700 US dollars / ton, and the corresponding production cost of lithium carbonate is close to 70,000 yuan / ton. After adding value-added tax, the bottom price of lithium carbonate has been close to 80,000 yuan / ton. Of course, 80,000 yuan is only the bottom price, and the latest market quotation for battery-grade lithium carbonate has far exceeded this level. we think that when the rigid gap of lithium salt is difficult to make up before 2023, the long-term shortage of supply and demand will easily lead to a sustained soaring price. even hit the previous historical high level of 160000 yuan. As for the sharp rise in the price of lithium salt, we need to consider the downstream acceptance. after calculation, taking an electric vehicle of 65Kwh as an example, when the price of lithium carbonate rises to 150000 yuan and 180000 yuan respectively, the cost of the battery of the whole vehicle will rise by 1726 yuan and 2761 yuan respectively compared with the current one. The impact of the rise in lithium price on the cost of the whole vehicle can be controlled.
Risk hint: sales of new energy vehicles fall short of expectations, and new production capacity in the industry exceeds expectations.
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