[minutes of SMM meeting] what are the hidden secrets behind the price of cobalt and lithium?

SMM1 March 18: according to SMM research, since December 23, 2020, the price of electrolytic cobalt has been rising all the way. As of today, the average price of electrolytic cobalt is 299500 yuan / ton, up 26.1% from the lowest level since the beginning of 2020. The price of lithium carbonate is also rising. As of today, the average price of battery-grade lithium carbonate is 63000 yuan / ton, up 58.49% from the lowest level since the beginning of 2020. The average price of lithium hydroxide is 48250 yuan / ton, up 14.88% from the lowest level since the beginning of 2020. Under the background of the good market demand for new energy vehicles, what are the hidden mysteries behind the recent soaring prices of cobalt and lithium? So SMM held a live broadcast of the new energy market, and Fang Shuxin, a new energy and strategic consulting analyst at SMM, gave you a detailed answer online.

Analysis and Forecast of the growth trend of domestic New Energy vehicle Market

The domestic new energy vehicle market was in the doldrums in the first half of 2020, and the market production and sales picked up in the second half of the year. The total sales volume in 2020 was about 1.367 million, an increase of about 10%. It is expected to reach 6 million in 2025, with an annual compound growth rate of 36%. In the power battery market, the installed capacity of power batteries fell in the first half of the year, and the market demand picked up in the second half of the year. The total installed capacity of domestic power batteries in 2020 was 63.6 GWH, an increase of 2.3% over the same period last year. It is estimated that the domestic demand for power batteries will reach 102.4GWh in 2021.

Since Q3 in 2020, the installed capacity of iron-lithium batteries in passenger cars has increased, mainly driven by the sales of models equipped with lithium iron phosphate batteries, such as Tesla's standard continued version of model3, BYD "Han", SAIC GM Wuling Hongguang Mini and Chery Automobile; it is expected that the demand for lithium iron will continue to grow in the future due to the advantage of performance-to-price ratio.

Motivation Analysis and Price Forecast behind Lithium Price fluctuation

Lithium carbonate

Domestic lithium salt plants resumed work smoothly in the first half of 2020, the demand for downstream cathode materials recovered relatively slowly, and the inventory of lithium carbonate increased by nearly 60%. Since the third quarter, the demand for cathode materials has increased significantly, and lithium carbonate began to go to the warehouse until the fourth quarter. Domestic supply even falls short of demand. Since Q4 in 2020, the demand for lithium carbonate of lithium iron phosphate and lithium manganate is growing faster than that of lithium cobalt and ternary materials, driving the demand for industrial-grade lithium carbonate to grow faster than that of battery-grade lithium carbonate, and the price difference between industrial carbon and electric carbon is gradually narrowing. It is expected that Q1 will continue the mood of stock preparation at the end of the year in 2021, the structure of supply and demand will not change greatly, and the price may steadily rise to 65000 yuan / ton.

Lithium hydroxide

In the first half of 2020, the domestic ternary demand for high nickel is insufficient, while the supply continues to grow, and lithium hydroxide continues to accumulate; in the second half of the year, the overseas demand for high nickel increases, and the supply and demand structure of lithium hydroxide is optimized. High-nickel ternary power batteries will be the core driving force of their future demand growth. In 2021, overseas mainstream new energy car companies such as Tesla and Mercedes-Benz will increase their production capacity mainly with high nickel. It is expected that the global demand for lithium hydroxide for high-nickel ternary power batteries will soar by 48% next year, alleviating the current oversupply structure, and prices will continue to rise.

Motivation Analysis and Price Forecast behind Cobalt Price fluctuation

"Click to view the SMM metal industry chain database

Since 2020, due to the impact of the epidemic, the demand for terminal power batteries has declined and cobalt prices have fallen; the demand for Q3 new energy vehicles has resumed, the demand for digital 3C terminals has exceeded expectations, the stock of raw materials has been tight, and cobalt prices have risen; the uncertainty of cobalt raw material supply has increased, demand-side expectations continue to improve, and the market is expected to be tight, which will support cobalt prices to rise further.

Introduction of SMM new energy business: research + consultation

Research: provide data and research services for more than 50 industrial chain enterprises

SMM ingenuously publishes weekly, monthly and annual reports on cobalt-lithium and new energy industries in English and Chinese, covering the supply and demand of cobalt-lithium upstream raw materials, cathode materials, downstream power batteries, new energy vehicles and other terminals, as well as the database of cobalt-lithium industry and downstream terminals.

Consultation: provide strategic optimization suggestions for enterprises combined with external market research and internal benchmarking analysis; cooperative projects cover the whole industry chain from mines to sulfates, materials, batteries and automobiles

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