Sichuan Energy Power plans to jointly develop the lithium iron phosphate project with Sichuan Road and Bridge, BYD, etc., with a net profit of more than 200 million in the first three quarters.

SMM October 29th: on October 28th, Sichuan Energy Power announced that in order to enter the strategic layout of the company's lithium-ion power battery industry chain, the company plans to set up a joint venture with Sichuan Luqiao, BYD and Mabian Yi Autonomous County Hefeng State-owned assets Co., Ltd., aimed at the comprehensive development of Mabian County phosphate resources and lithium iron phosphate project.

According to the announcement, Chuaneng Power has subscribed 200 million yuan, accounting for 20% of the registered capital of the joint venture company. The joint venture company is tentatively named "Sichuan Shuneng Mineral Investment Co., Ltd." with a registered capital of 1 billion yuan. It is mainly responsible for phosphate exploration, mining and processing, phosphate resources investment, lithium iron phosphate new material project investment in Mabian County and its adjacent areas.

Referring to the reasons for foreign investment, Sichuan Energy Power made it clear in the announcement that phosphorus as an indispensable part of lithium materials, with the increasing demand for lithium materials in the downstream market, the market demand for phosphate rock, ammonium phosphate, phosphoric acid and other upstream raw materials is also rising. However, phosphate rock is non-renewable and scarce, and all countries have export restrictions. After this overseas investment, Chuaneng Power will indirectly enjoy phosphate rock resources through equity participation in the joint venture company, which will play a positive role in promoting the future development of the company.

Previous research by SMM shows that with the continuous popularity of the new energy vehicle industry, the overall demand for upstream lithium iron phosphate materials in China is driven, and the price of dynamic lithium iron phosphate is also rising. According to the spot price of SMM, as of October 28, the average spot price of domestic power lithium iron phosphate has risen to 88000 yuan / ton, up 50000 yuan / ton from the beginning of the year, an increase of 131.6%.

"Click to view the price of SMM new energy products

Recently, according to SMM research, lithium iron phosphate rose relatively slowly this month after a rapid uplink last month. On the one hand, it is mainly due to the recent reduction of production of key raw materials lithium carbonate upstream due to power cuts and battery factories. Due to high price factors, demand has weakened, while the upstream sentiment of cherishing sales has weakened, supply and demand of lithium carbonate has tightened slightly, and the upward trend in prices tends to be flat. In addition, at present, the power restriction policy in Guangxi, Yunnan, Guizhou and other regions has been relaxed, the power restriction has been weakened, the production capacity of local yellow phosphorus and some phosphorus chemical enterprises has rebounded, the operating rate has gone up, and the prices of some iron phosphate raw materials such as phosphoric acid have fallen rapidly, driving down the price of iron phosphate.

However, SMM believes that the current demand for new energy vehicles is in the fourth quarter, the proportion of demand for new energy vehicles with superimposed iron lithium batteries in new energy vehicles is increasing, the demand for uplink is increasing, and the supply gap of iron and lithium is still there, which forms a support for prices. It is expected that the price of lithium iron phosphate will remain high and stable in November. "View details

On the same day, Chuaneng Power also announced that it had signed an "equity transaction intention agreement" with Sichuan Road and Bridge, intending to transfer its 5 per cent stake in Sichuan Neng Lithium Industry to Sichuan Road and Bridge.

A few days ago, Chuaneng Power just released its financial results for the third quarter of 2021. According to the financial data, its total revenue in the third quarter was 192 million yuan, down 46.32% from the same period last year. The net profit belonging to shareholders of listed companies was 585200 yuan, up 41.52% from the same period last year.

The company's total revenue in the first three quarters was 2.236 billion yuan, an increase of 66.39% over the same period last year, and the net profit attributed to shareholders of listed companies was 225 million yuan, an increase of 19.83% over the same period last year.