[SMM Analysis] Lithium salt prices may rebound from the bottom in the fourth quarter.

SMM10 March 27: according to the Australian bankruptcy management company Korda Mentha announcement, the Australian lithium concentrate production company Altura has entered the bankruptcy administration.

Citic Securities said that Altura is an important producer and supplier of lithium concentrate and is one of the top five lithium mines currently being produced in Australia, with a lithium concentrate capacity of 220000 tons per year. The company has entered commercial production since the second quarter of 2019, with production and sales of lithium concentrate of 165000 tons / 121000 tons in 2019 and about 133000 tons / 129000 tons in the first three quarters of 2020, accounting for more than 10% of the supply of lithium concentrate in Australia. The company's downstream customers include Ganfeng Lithium Industry, Ruifu Lithium Industry, Zhiyuan Lithium Industry, Yongshan Lithium Industry and so on.

SMM believes that Australian mineral clearance will continue as lithium prices continue to fall. By the end of July 2020, the price of lithium ore had fallen below US $400 per ton, making it difficult for miners to support it. As one of the top five lithium ore suppliers in Australia, Altura has signed long-term agreements with a number of large lithium smelters in China. From the supply side, its bankruptcy restructuring will further affect the supply of Australian lithium concentrate, superimposed domestic Q2, Q3 lithium concentrate destorming is obvious, lithium concentrate price is expected to rebound, transmission to the downstream will surge lithium salt plant cost pressure. On the demand side, due to the impact of the epidemic this year, the impulse time of the terminal battery has been delayed, and the impulse loading began in the fourth quarter, and some downstream materials reported that the demand for lithium salt is expected to continue to grow in November. Overall, domestic lithium carbonate and lithium hydroxide prices are still hovering at the bottom, and prices are expected to continue to rise under cost pressure in the fourth quarter.