SHANGHAI, Aug 18 (SMM) - It was reported on August 17 that China's largest lithium extraction from brines project – led by Qinghai Salt Lake Fozhao Lanke Lithium Company ("Lanke Lithium") with an annual capacity of 20,000 mt battery-grade lithium carbonate – has been basically completed and started commissioning. The project was initiated in December 2017, with a total investment of 3.132 billion yuan, and construction began on April 18, 2018.
Public company Keda Manufacturing (600499.SH), which has a stake in Lanke Lithium, released its semi-annual report on August 14. According to the report, Lanke Lithium produced 8,466 mt of lithium carbonate and sold 7,435 mt, achieving an operating income of about 507 million yuan and net profit of about 234 million yuan, of which Keda Manufacturing recognized its investment income at about 114 million yuan.
Based on the above financial data, 7435 mt of sold lithium carbonate can achieve an operating income of 507 million yuan, thus the average selling price of lithium carbonate of Lanke Lithium can be calculated as 68,200 yuan/mt. And based on the fact that the net profit was 234 million based from the operating income of 507 million yuan, then the cost and profit margin of lithium carbonate can be calculated as 35,500 yuan/mt and 46.15% respectively.
Furthermore, the domestic battery-grade lithium carbonate was quoted between 95,000 yuan/tonne - 98,000 yuan/mt with an average price of 96,500 yuan/mt in the last trading day of August 17. The intraday price of lithium carbonate rose by 1,000 yuan/tonne. When the product is priced at 68,200 yuan/mt, the profit margin will reached 46.15%. If the quote is raised to 96,500 yuan/mt, then the profit margin will be as high as 63% or more.
It is also worth noticing that the price of lithium carbonate is currently on an upward trend, and the cost will be further reduced after scale production and technology improvement of Lanke Lithium.
According to the information from Enterprise Search, Lanke Lithium was established in March 2007 with a registered capital of 343.3 million yuan, mainly engaged in lithium carbonate products, as well as the research, development, production and consultation of lithium products such as lithium chloride, lithium hydroxide, lithium metal and lithium-magnesium alloy. Lanke Lithium is a rising star in the domestic lithium industry with significant resource advantages and high competitiveness in the market.