SMM, November 20: On November 19, Canmax announced that to promote the exploration and development of mineral resources, the Ministry of Natural Resources, in accordance with relevant laws and regulations, has organized the Sichuan Provincial Department of Natural Resources to implement the bidding for the exploration rights of the Maijitan Lithium Mine in Ganzi Prefecture, Sichuan Province. The bidding for the exploration rights of the Maijitan Lithium Mine will be conducted publicly at the Sichuan Provincial Government Service and Public Resource Trading Service Center. Bidding documents are to be submitted between 8:30 AM and 10:00 AM on November 20, 2024, with the opening of bids scheduled for 10:00 AM on the same day. The submission location is the first bid opening room on the 7th floor of the Fengde Chengda Center, No. 101 Gulou South Street, Qingyang District, Chengdu. The company plans to participate in this bidding for the exploration rights of the Maijitan Lithium Mine.
According to the data, the Maijitan Lithium Mine in Ganzi Prefecture, Sichuan Province covers an area of 20.3843 square kilometers, with an initial transfer period of 5 years. As a leading producer of battery-grade lithium hydroxide, Canmax has been actively expanding upstream quality lithium resources to ensure strategic reserves of quality lithium ore resources. If the company successfully bids for the exploration rights of the Maijitan Lithium Mine, it will help increase the company's lithium ore reserves, effectively ensuring the supply of lithium ore resources and enhancing the company's core competitiveness.
On the same day, the company also announced that it agreed that its controlling subsidiary would apply for the qualification of a designated lithium carbonate delivery warehouse at the GFEX, authorizing the company's management to submit application materials and handle other related matters.
Canmax stated that applying to become a lithium carbonate delivery warehouse designated by the GFEX can fully utilize the company's existing resources, improve the company's standardized management level, and facilitate the organic integration of the spot market, futures market, and delivery warehouse, further enhancing the company's risk resistance and market competitiveness, and improving the company's profitability.
At the end of October, Canmax also released its performance report for the first three quarters of 2024, mentioning that the revenue for the first three quarters of 2024 was approximately 5.453 billion yuan, a YoY decrease of 38.8%. The net profit attributable to shareholders of the listed company was approximately 923 million yuan, a YoY decrease of 49.31%.
Previously, Canmax was asked about the reasons for the significant decline in the company's performance in recent years. The company stated that the market environment of the new energy lithium battery industry has affected the prices of lithium chemicals, which have decreased YoY, while costs have increased YoY, leading to a decline in operating performance YoY.
According to historical quotes from SMM, the spot price of battery-grade lithium hydroxide rose to a historical high of 560,000 yuan/mt in 2022. However, since entering 2023, its price has continuously declined, and as of November 20, 2024, the average spot price of battery-grade lithium hydroxide has dropped to 67,800 yuan/mt, down 522,200 yuan/mt from the previous historical high, a decrease of 93.25%.
In the first three quarters of 2024, the average spot price of battery-grade lithium hydroxide was 86,413 yuan/mt, down approximately 221,100 yuan/mt from 307,483 yuan/mt in the same period of 2023, a decrease of 71.9%.
Previously, Canmax mentioned in a media interview that the selling price of lithium hydroxide is determined based on SMM prices of related products. Due to fluctuations, the price will also change accordingly.
In the context of a supply surplus of lithium chemicals and weak downstream demand, the spot price of lithium hydroxide followed the price of lithium carbonate downward. However, recently, with the improvement in downstream demand, the prices of lithium carbonate and lithium hydroxide have both risen. According to an SMM survey last week, on the supply side, major lithium chemical smelters currently have a strong sentiment to stand firm on quotes, with some increases in spot order quotes and intentions to raise long-term contract discounts. On the demand side, some ternary cathode material producers reported some spot order demand recently. Faced with the firm quotes from lithium chemical smelters, apart from some transactions for just-in-time needs, they are temporarily holding a wait-and-see attitude. Overall, the spot price of lithium hydroxide in the market has slightly increased, driving a small upward shift in the price center of lithium hydroxide.
Additionally, Canmax has been actively expanding its mineral resources. The company's subsidiary, Sichuan Tianhua Times Lithium Energy Co., Ltd., has won the exploration rights for the Rongxukanan Lithium Mine in Daofu County, Sichuan Province. Canmax stated that as a leading producer of battery-grade lithium hydroxide, it has been actively expanding upstream quality lithium ore resources. The acquisition of the exploration rights for the Rongxukanan Lithium Mine will help increase the company's strategic reserves of lithium ore resources, effectively ensuring the supply of lithium concentrate raw materials and enhancing the company's core competitiveness. The company has also invested in upstream lithium resource companies and signed long-term procurement agreements in countries and regions such as Australia, South America, and Africa, participating in strategic placements to ensure and consolidate the stable supply of upstream quality lithium concentrate raw materials.
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