Break through 200000 yuan / ton! "hard currency" Lithium Carbonate continues to "appreciate"

As one of the "hard currencies" of the lithium battery industry, the "madness" of lithium carbonate continues. The price of battery-grade lithium carbonate exceeded 200000 yuan per ton for three consecutive days, a record high, up 359.8 percent from 43500 yuan per ton in the same period last year and 277.4 percent so far this year, according to SMM.

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In this regard, Guotai Junan believes that the third rise in lithium prices has been brewing and started, stock will become the catalyst for the third rise in lithium prices before the end of the year, and lithium carbonate prices will take the lead. On the basis that the current lithium price has reached an all-time high of 200000 yuan / ton, there will be room to rise in 2022 and 2023.

"the price of battery-grade lithium carbonate is higher, resulting in increased downstream cost pressure, so downstream enterprises also intend to increase prices, but there is a lag in price transmission. During the period of price increases, profits of downstream enterprises will contract due to high prices at the end of raw materials. China is highly dependent on imported lithium ore, and the rising price of lithium ore resources is one of the future trends. " Market analysts point out.

At present, the global new energy vehicle market is in a resonant upward stage, and the permeability continues to increase, driving the lithium battery industry chain to maintain a high boom. In terms of the world's largest Chinese market, retail sales of new energy vehicles in China from January to October this year were 2.139 million, up 191.9 per cent from a year earlier, according to data released by the China Automobile Federation. Among them, the market penetration rate of new energy vehicles reached 16.4% in October, and the market penetration rate of new energy passenger vehicles reached 18.2%.

In terms of installed capacity, data from the Power Battery Application Branch show that from January to October this year, the total installed capacity of power batteries in China reached 113.1 GWH, an increase of 173.3% over the same period last year. Among them, the total loading of ternary batteries was 57.3GWh, an increase of 102.1 percent over the same period last year, and that of lithium iron phosphate batteries was 55.6GWh, an increase of 334.2 percent over the same period last year.

According to research data from Sino-Thai Securities, the global demand for new energy vehicles has increased by as much as 40% this year, but the supply of lithium carbonate has only increased by about 27%. From a domestic point of view, since the third quarter, the demand for power battery capacity has continued unabated. At present, major domestic mainstream factories have entered the annual shutdown and overhaul. Some manufacturers are affected by the shortage of spodumene concentrate and the delay in the storage of raw materials, which leads to the release of production capacity, which directly leads to the tight supply of lithium carbonate and obvious upstream bullish sentiment.

In the longer term, the demand for lithium carbonate will continue to rise with the development of the new energy vehicle industry. Everbright Securities Research report predicts that the global penetration rate of new energy vehicles will reach 20% in 2025, corresponding to the sales of 18.24 million new energy passenger vehicles; corresponding to the sales of 710000 new energy commercial vehicles, the total demand for lithium carbonate of new energy vehicles will reach 1.002 million tons.

Supply will still be in short supply

In fact, with the continued popularity of the lithium battery industry, the major lithium material companies around the world are stepping up the expansion of lithium carbonate production. For example, SQM, one of the largest lithium giants in the world, announced that the production capacity of lithium carbonate will be increased from 120000 tons to 180000 tons in 2022. Industry research institutions predict that overseas lithium enterprises will increase their production capacity by about 320000 tons in 2022.

In China, Tianqi Lithium Industry currently has a total capacity of about 45000 tons / year of lithium chemical products, including 34500 tons / year of lithium carbonate, as well as 20, 000 tons / year of battery-grade lithium carbonate under construction. Yongxing said that the Baishicun Huashan porcelain stone mine, which is controlled by the company, has proven reserves that can support the annual production capacity of 30,000 tons of battery-grade lithium carbonate after the second phase is put into production.

It is worth noting that with the breakthrough in technology and cost of extracting lithium from salt lake, it has commercial value. At present, Lanke Lithium Industry, Zangge Holdings, Minmetals Salt Lake and CITIC Guoan have all laid out salt lake lithium extraction production projects in Qinghai. Lanke Lithium Carbonate has a daily output of about 100 tons in peak season, with an annual production capacity of 30,000 tons. Zangge Holdings currently has a daily production capacity of about 30 tons. Dongtai Jinel lithium carbonate actual production capacity is about 15000 tons / year.

At the same time, as China's lithium carbonate and other lithium salts are highly dependent on imported lithium ore, many downstream battery companies will also choose to buy lithium ore overseas.

Shengxin Lithium Energy, for example, plans to buy a 51 per cent stake in MaxMind Hong Kong, which owns mining licenses for a total of 40 rare metal blocks at the Sabixing lithium-tantalum mine in Zimbabwe. Zijin Mining intends to acquire a stake in Canadian lithium salt merchant Neo Lithium, Neo Lithium wholly owns 7 million tons of lithium carbonate equivalent (LCE) 's Argentine TresQuebradas (3Q) lithium salt lake project. Ningde Times holds an 8 per cent stake in Neo Lithium, making it the company's third-largest shareholder.

In the view of industry insiders, with the rising price of lithium ore resources becoming an inevitable trend, Chinese companies buy a large number of lithium mines overseas, mainly to ensure that prices are relatively stable in the future and have more say in the industry.

However, although lithium companies have increased their production capacity, according to the global mainstream mine and salt lake production expansion plans, the supply-side increment is expected to be limited in 2021, and the lithium carbonate market will continue to show a structural shortage. Lithium carbonate producers' inventories continue to be removed, which has been low in recent years, which will push up the price of lithium carbonate.

But on the other hand, analysts believe that if lithium prices continue to rise too fast, there will be negative feedback. First, the downstream feels the pressure; second, better profits will attract many competitors, and some enterprises outside the industry will also rush in; third, if the lithium price remains high, the development of alternative lithium battery products will accelerate.

Zeng Yuqun, chairman of the Ningde era, said: "whoever tries to raise prices at random, we will exclude them."