2024 South America Lithium Resources Field Trip - Sixth Stop: Tsingshan Group

In recent years, the dramatic fluctuations in lithium prices have brought a mix of "sweet and bitter" experiences to enterprises across the industry chain. Although lithium prices have long lost their former glory, the development prospects of the new energy industry chain remain promising under the global advocacy for a low-carbon economy, further highlighting the importance of lithium resources.

As one of the regions richest in lithium resources globally, South America, particularly the "Lithium Triangle" (Bolivia, Argentina, Chile), holds over 55% of the world's proven lithium resources. Therefore, South America's lithium resources play a critical role in the global energy transition.

Against this backdrop, SMM organized the 2024 South America Lithium Resources Field Trip, led by SMM Client Manager Siyu Chen. From November 26 to December 7, 2024, the delegation visited lithium-related enterprises in South America, toured local lithium mines and material companies, and held discussions with company executives to explore potential opportunities in lithium resource development, technical exchanges, and investment cooperation. On the afternoon of November 30, SMM and the delegation members headed to Tsingshan Group for in-depth exchanges.

Corporate Insights

SMM and the delegation members visited Tsingshan Group, where Tsingshan South America Chairman Jing Li warmly received the delegation and provided a detailed introduction to the company's business development.

Tsingshan Group began in the 1980s and officially registered its first major group company, Tsingshan Holding Group Co., Ltd., in June 2003. The company's business scope covers manufacturing, sales, warehousing, investment, and import and export trade. It primarily produces stainless steel ingots, steel bars, sheets & plates, wire rods, and seamless pipes, which are widely used in industries such as petroleum, chemicals, machinery, power, automotive, shipbuilding, food, pharmaceuticals, and decoration. Additionally, it produces raw materials, intermediate products, and new energy batteries for the new energy sector, mainly applied in energy storage systems and electric vehicles.

The company's mission is "Refining Stainless Steel for a Century, Building a Green Future." Tsingshan is committed to creating high-quality, low-cost, energy-efficient, and environmentally friendly stainless steel and new energy products to meet the global demand for safer, more convenient, comfortable, and healthy living.

Technical Exchange

SMM and the delegation members engaged in in-depth discussions with Tsingshan Group on project progress, lithium carbonate, and future trends in the lithium battery industry.

When discussing lithium carbonate, both parties noted that its price is influenced by multiple factors, including capital flows, market speculation, and demand, leading to a gap between futures contract prices and spot prices. The price has remained at the bottom for an extended period. The previous round of market speculation prompted some suspended enterprises to resume production, causing lithium carbonate prices to rise from 68,000 yuan to 87,000 yuan, with the current price around 70,000 yuan/mt.

On the cost side, Tsingshan Group stated that the costs of its Argentina project are high, with both project construction and labour costs significantly exceeding those in China. Additionally, the preparation costs for lithium carbonate in regions like Africa are relatively high, whereas the cost of extracting lithium from salt lakes in China is comparatively low, offering resource and cost advantages. However, despite the abundant mineral resources in Tibet and Xinjiang, challenges remain in capacity release.

It is also worth noting that regions like South America are adopting a wait-and-see approach to new projects, resulting in slower release of new lithium capacity. In Australia, the thin profit margins of the lithium carbonate industry have made it difficult for enterprises to resume production after suspension, with operating rates lagging behind those in China.

Field Trip Group Photo

After touring the factory, SMM and the delegation members took a group photo with Tsingshan Group, strengthening their cooperative friendship. It is believed that deeper exchanges and cooperation will follow!

Through this field trip and survey, SMM and the delegation members gained a deeper understanding of Tsingshan Group's development and a more profound insight into the current market status, development trends, and challenges of the lithium battery industry in South America. They will continue to deepen cooperation with major enterprises to achieve complementary advantages and promote the development of the lithium battery industry.