Lithium carbonate price increase "too much" Ningde era / BYD led the public to "rise up"

The rise in the price of lithium battery materials is nothing new, and some have become commonplace. Before that, the industry was able to put up with the lewd power of "cobalt" grandma and six "master" lithium fluorophosphate, but now the price rise of lithium carbonate is so arrogant that it is difficult to accept.

According to the spot price of SMM, the price of battery-grade lithium carbonate rose again to 498000 yuan / ton on March 8, and the price of spodumene concentrate rose 20 U.S. dollars / ton to 2785 U.S. dollars / ton. At the same time, metal lithium, lithium hydroxide and other materials are also rising across the board.

The frenzied rise in lithium carbonate prices has triggered industry boycotts, with reports that domestic battery giants, including Ningde era and BYD, have "rebelled".

It is rumored that as the leader of power battery, Ningde era once said that if the price of lithium carbonate rises to more than 470000 yuan / ton, it will no longer accept orders. In addition, some domestic cathode material enterprises are also calling for a way not to buy goods, together to resist the rise in lithium prices. It is reported that BYD, which has always liked to "work alone", also participated in the call.

No wonder the price of lithium carbonate has risen too much.

"I joined the industry in 2018, when the lithium carbonate market was at its lowest point, about 28,000 to 30,000 yuan per ton." The head of a material company said. Today, the price of lithium carbonate is more than 500000 yuan per ton, an increase of more than 1000%, a more than tenfold increase.

What's more, the price of lithium carbonate is rising faster and faster!

At the beginning of 2021, the price of lithium carbonate was about 50, 000 yuan / ton. by August 2021, battery-grade lithium carbonate was quoted at 100000 yuan / ton, a modest increase of only 100%. After that, the price of lithium carbonate was like riding on a rocket, soaring into the sky, rising rapidly to the recent "sky-high price" of 500000 yuan / ton in just a few months.

Especially in the last two months, the rate of increase is even more astonishing. It took 30 days for the domestic price of battery-grade lithium carbonate to rise from 300000 yuan / ton in January to 400000 yuan / ton, while it only took about 20 days to rise from 400000 yuan / ton to 500000 yuan / ton, according to Xinhuo Lithium Power.

Moreover, the rise in the price of lithium carbonate seems to show no sign of stopping. In January, Australian lithium miner Allkem Ltd said it expected lithium carbonate prices to rise another 80 per cent in the second half of fiscal 2022 compared with the first half due to a surge in demand for metals used in electric car batteries. Many people in the industry also said that the price increase of lithium-related raw materials is likely to continue until the end of 2023.

If this market cannot be effectively curbed, the harm to the industry will be enormous.

The mood of reducing production is spreading.

Although, at present, Ningde era, BYD and other news of boycotting the price increase of lithium carbonate have not been "confirmed" by the parties. However, the rampant price of lithium carbonate has had a negative impact on the entire lithium battery industry chain.

"now, due to the high price of lithium carbonate, the production of A00 new energy vehicles in various mainframe factories has been reduced, and production has been reduced in the Ningde era." In the exchange group of a new energy automobile industry, some people in the industry analyzed it.

It is reported that the model of a best-selling domestic electric vehicle brand has temporarily stopped accepting new orders, and the head of the brand said that after a sharp rise in the price of raw materials in 2022, a single unit lost more than 10,000 yuan. "if the price of an electric car under 200000 yuan is not increased, it will be sold at a loss." People in the industry sigh.

And Ningde era production reduction, is recently there are market rumors, Ningde era and some lithium iron phosphate manufacturers cut production plans in March. In this regard, the Ningde era refuted the rumor that this news is not true.

Even so, share prices in Ningde era have fallen continuously recently. On March 7, the share price of Ningde era fell by more than 7%, and the market capitalization almost fell below the 1 trillion yuan "support" mark, which has lost more than 500 billion yuan since the market capitalization of Ningde era was as high as 1.6 trillion yuan. As of March 8, Ningde Times bid once hit 443 yuan, a new low in nearly four months.

It is obvious that the refutation of rumors in the Ningde era did not work. Perhaps for capital that is extremely sensitive to security borders, uncertainty means risk.

Because if Ningde era production reduction, means that this lithium battery plate leader and even the entire industry performance growth may be "lower than expected." We often see such hints on risks in IPO prospectuses, various announcements of listed companies, and brokerage research reports.

"due to the skyrocketing prices of raw materials, the industry has made a new judgment on the overall direction of the new energy vehicle market this year. Perhaps the situation this year will not be too optimistic, and the growth rate of more than 100% in the past may not be seen again this year." Market analysts said.

In fact, the stock price of the entire lithium battery board has been falling recently, not just in the Ningde era. As of press time, the ICBC Credit Suisse Lithium Battery ETF Fund is down more than 3%, and plunged 4.96% on March 7.

Even so, in the eyes of people in the industry, the price of lithium carbonate as high as 500000 yuan per ton has squeezed the confidence of three or four echelon battery factories to take goods. From the perspective of cost accounting, it has reached the enterprise's limit. Some iron and lithium manufacturers have begun to reduce delivery and discharge production.

Subdue the high-priced "evil" lithium carbonate

Lithium carbonate has become a demon. Guotai Junan pointed out that the rapid rise in the price of battery-grade lithium carbonate is mainly due to the urgent demand for lithium carbonate from lithium iron phosphate manufacturers, especially in the field of overseas energy storage batteries. However, at present, 80% of the world's lithium minerals can be distributed overseas, especially in Australia, South America and other regions, and the average production expansion cycle is 3-5 years.

"the supply shortage pattern of lithium resources is expected to be difficult to change in the short term, and the increase in lithium supply will not occur in a year," industry analysts pointed out. The shortage will not be alleviated until 2024 or 2025, but even then the situation that supply falls short of demand will not be completely reversed.

In the face of rising lithium prices, battery head manufacturers such as Ningde era, LG New Energy, Fudi Battery and Yiwei Lithium Energy are stepping up efforts to snap up upstream resources, and the battle for lithium materials is becoming increasingly fierce. As China's lithium salts such as lithium carbonate are highly dependent on imported lithium mines, many downstream battery companies will also choose to buy lithium mines overseas.

It is worth noting that some people in the industry believe that lithium carbonate is actually tight and not short, and the high price is caused by man-made panic buying, some of which manufacturers prepare goods in advance, and there are also dealers hoarding.

The tight supply of lithium resources and skyrocketing prices have attracted the attention of national government departments. Xin Guobin, vice minister of the Ministry of Industry and Information Technology, pointed out: "with a view to meeting the production needs of power batteries, we should appropriately speed up the development of domestic lithium resources and crack down on unfair competition such as hoarding and driving up prices. At the same time, improve the power battery recycling system. "

Zeng Yuqun, chairman of Ningde Times, said that the current supply and demand situation of lithium resources is grim, so we should speed up the exploration and development of domestic lithium resources to ensure the security of the supply chain, while strengthening independent innovation and tackling key scientific and technological problems to improve the level of recycling and efficient utilization of resources.

"if lithium prices continue to rise too fast, there will also be negative feedback," some analysts have judged before, and now the industry's boycotts, production cuts and other "uprisings" seem to confirm this inference. If lithium carbonate rises "too much", the "wave of revolution" will overthrow you.