Lithium resources industry boom continues to rise product prices "rising" risk hint how far the lithium city can go?

SMM August 10: recently, the prosperity of the lithium resources industry continues to rise, reflected in the spot price, the price trend of its related products is also very strong. In the past week alone, a group of lithium-related metals and lithium salts, led by spodumene concentrate (6%, CIF China), have seen a wave of increases to varying degrees, according to spot quotations from SMM. Among them, spodumene concentrate performed best, with an increase of 8.7% in just five trading days. Battery-grade lithium hydroxide, one of the core materials of power batteries, has also increased by 7.1% in five trading days for various reasons.

The following are detailed data:

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The reason why the lithium resources industry was so strong last week is inextricably linked to the good news announced in turn last week. Next, SMM will sort it out for you in detail.

First, on July 29th, Australia's main lithium mine Pilbara auctioned its spodumene concentrate, during which 17 bidders expressed strong interest, resulting in the highest bid of US $1250 / Mt, plus a record price of 1315 USD/t (CIF China) for 65 freight.

It is worth mentioning that this is not the first auction of spodumene concentrate, after another Australian lithium miner Galaxy Resources also auctioned spodumene concentrate outside the long order, and the final transaction price was unexpectedly higher than the market price.

In this regard, some industry insiders analyzed that the results of the auction will affect the long order price to a great extent in the future, or will become a catalyst for the rise of lithium price in the future. As market sentiment continued to ferment, the price of spodumene concentrate also ushered in a rise in the next few days.

On July 30, many agencies predicted that the lithium industry would continue to face tight supply and demand in the second half of the year. Warburg Securities said that looking forward to the second half of the year, the lithium industry will continue to face tight supply and demand, and due to the continuing shortage of lithium resources, the prices of spodumene, lithium carbonate and lithium hydroxide are expected to rise alternately in the future. Superimposed cobalt consumption season in the third quarter and the development of ternary high nickel technology, Warburg Securities predicts that nickel, cobalt and lithium prices are expected to start a new round of rise in the third quarter.

On the same day, the Ministry of Industry and Information Technology released national lithium ion production data for the first half of 2021. According to statistics, in the first half of 2021, the global lithium-ion battery industry has developed rapidly. The output of lithium-ion batteries has exceeded 110GWhh, an increase of more than 60% over the same period last year, and the total output value of the industry has exceeded 240 billion yuan. And it is worth mentioning that, whether it is upstream cathode materials, negative materials or electrolytes, diaphragms, its output increased by more than 130% in the first half of 2021, and the momentum of development is very rapid.

In addition, at a meeting held by the political Bureau of the CPC Central Committee on July 30, it was mentioned to support the accelerated development of new energy vehicles and further raise them to the national level, triggering a carnival of the new energy vehicle sector. Lithium battery as an important part of new energy vehicles, its degree of attention is naturally not the same.

Moreover, as early as July 23, the National Development and Reform Commission and the National Energy Administration also issued the "guidance on accelerating the Development of New Energy Storage", requiring that energy storage technologies should be diversified and that the cost of relatively mature new energy storage technologies such as lithium-ion batteries continue to decline and be applied on a commercial scale.

On August 2, * ST Salt Lake announced that it would resume listing on August 10, and under the influence of the news that foreign spodumene concentrate auctioned a record high, China once again had a very optimistic attitude towards lithium extraction from salt lakes that could be "made of local materials". The agency said that lithium extraction from domestic salt lakes had stood on the inflection point of large-scale industrialization, and the lithium extraction plate from salt lakes had ushered in a favorable situation again.

And including Nord shares, Tianhua Ultra Clean, New Zebang, Yongxing Materials and other enterprises released eye-catching data around August 2 semi-annual results, but also to a certain extent stimulated the upward momentum of the lithium plate.

In addition, with the explosive demand for power batteries in the market, lithium battery cathode materials, negative electrode materials, electrolytes and diaphragms are all in a hurry. On the evening of August 2, a number of enterprises issued production expansion announcements. New Zebang announced that it will invest about 1.5 billion yuan in electrolyte projects in the Netherlands, with a construction period of 3.5 years and is expected to be gradually put into production in the second half of 2024.

Yiwei LiNeng also announced that it plans to set up a joint venture with Enjie (002812) to focus on the manufacture of lithium-ion battery separators and coated membranes, with an annual production capacity of 1.6 billion square meters of wet base membrane and coated films that match its production capacity, and give priority to supplying Yiwei LiNeng and its subsidiaries.

As for Shanshan, it spent 8 billion yuan to expand the production of anode materials, and agreed to its subsidiary Shanghai Shanshan to set up a project company in Meishan, Sichuan Province and invest about 8 billion yuan to build an integrated base with an annual output of 200000 tons of lithium-ion battery anode materials. The project will be carried out in two phases with a production capacity of 100000 tons and a planned construction period of 16 months each.

On August 3, the price of lithium hexafluorophosphate, one of the raw materials of electrolyte, ushered in another wave of rise, stimulating market sentiment.

On August 4, Soochow Securities Research News pointed out that the lithium equipment industry is a golden growth track and will continue to benefit from the global electrification trend in the future. Soochow Securities believes that in the context of the suspension of the overseas epidemic, the expansion of overseas battery factories will be significantly accelerated in 2021, and the scarcity of leading equipment manufacturers will gradually appear. In the future trend of globalization, equipment companies have the early cycle to benefit first.

On August 5, industry sources said that the shortage of lithium iron phosphate supply may be difficult to alleviate in the short term, and according to SMM research, due to the results of overseas pilbara lithium ore bidding sales, the seller's market is obvious, and the reduction in overseas imports has led to the suspension of production and maintenance of some manufacturers, a reduction in supply, the gradual commissioning of demand terminal iron lithium plants, a small increase in power demand, and a tight balance in the domestic lithium carbonate market. The material factory is weak and the transaction price is forced to go up.

On the same day, Ganfeng Lithium Industry announced in the evening that the subsidiary plans to invest 8.4 billion yuan with its own funds to build an annual 15GWh new lithium battery project.

On August 6, the domestic lithium battery and new energy vehicle sector went on a spree after Biden signed an executive order setting the target of 50% of new car sales by 2030. On the evening of August 5, BYD also announced its production and sales of KuaiBao in July 2021, the most eye-catching of which was the record sales of new energy vehicles, with a record high of 50492 vehicles, an increase of 234.38% over the same period last year.

Affected by these good news, BYD's market capitalization exceeded 900 billion yuan that day, and it was even reported that BYD would supply "blade batteries" to Tesla. In addition, BYD also decided to set up "Wuwei Fudi Battery Co., Ltd." to expand battery capacity while providing supporting facilities for Hefei BYD Automobile Co., Ltd.

It is worth mentioning that under the influence of all kinds of good news at home and abroad, Salt Lake, a former loss-making king, set off a rough wave in the stock market on the first day of its resumption of listing on August 10. As of the close, Salt Lake shares closed up 306.1% at 35.9 yuan per share, compared with 8.84 yuan per share when trading was suspended.

Some industry insiders say that with the rapid development of the new energy vehicle industry, the lithium resources industry is expected to enter a high economic cycle. It should be noted that after the stock price has risen in turn, including Jiangte Motor, Sichuan Energy Power and Guoxuan Hi-Tech and even a number of lithium mining companies in Salt Lake, which have just resumed listing today, have all warned of the risks. Investment still needs to be treated with caution.

Overall, SMM analysis said that the lithium market was affected by expected hype, contract stimulus, rising mineral prices and production capacity on the demand side, and the quotation rose significantly. The increase in hoarding sentiment may lead to market imbalance, and the increased influence of the seller's market will lead to an upward price. According to recent research, lithium carbonate, SMM expects that the current downstream is in a period of consumption, it is expected that the transaction price of lithium carbonate will still have an upward trend in the short term. As for lithium hydroxide, some smelters on the supply side are still in the maintenance period, the impact of production is obvious, the quotation part jumped to 11.8-124000 yuan / ton, the price is also expected to continue to rise.