Lithium industry duo power agency research and judgment: the tuyere lithium price rise is expected to exceed expectations

On March 17, the two concept plates of lithium mining and salt lake lithium extraction were pulled up at the same time, and many stocks in the plate rose sharply. As of today's close, Koda Manufacturing and Tibet City Investment were up by the daily limit, Tianqi Lithium Industry was up 7.02%, and Ganfeng Lithium Industry was up 5.91%. Brokerage online: after the early equity market valuation adjustment, lithium plate configuration attractiveness has been greatly improved, lithium prices are expected to remain high for longer than expected. Lithium mine prices are expected to accelerate, and the increase and sustainability are expected to exceed market expectations. Multi-stock rally data show that on March 17, 10 stocks of the lithium mining plate were floating red, with a daily turnover of 17.322 billion yuan. Tianhua Super net rose 9.52%, Tianqi Lithium Industry rose 7.02%, Ganfeng Lithium Industry rose 5.91%, and Yongxing Materials rose 7.44%. Salt Lake lithium plate daily turnover of 9.801 billion yuan, Koda Manufacturing, Tibet City Investment limit.

On the morning of March 17, Guotai Junan released a research report saying that the current demand cycle of the lithium industry is strong, but due to the mismatch between global supply-side lithium resources and lithium smelting, lithium prices are expected to remain high for longer than expected.

On the evening of March 16, Qi Ding, chief analyst of non-ferrous metals at Anxin Securities, said that lithium mine prices are expected to accelerate in the first quarter of 2021, and the increase and sustainability are expected to exceed market expectations.

The price of lithium has risen sharply.

According to SMM, the average price of lithium metal was 565000 yuan / ton on March 17, up 80, 000 yuan / ton so far this year. The average price of lithium carbonate was 80500 yuan / ton, up 32500 yuan / ton so far this year. The average price of lithium hydroxide was 67000 yuan / ton, up 18000 yuan / ton so far this year.

According to media reports, the first mid-month assessment by Benchmark Mineral Intelligence, a battery supply chain research and price reporting agency, shows that lithium prices in China continue to rise exponentially against the backdrop of strong demand for lithium iron phosphate batteries. Benchmark's midpoint price of battery-grade lithium carbonate in mid-March showed that the raw material had risen 88 per cent since the start of the year to more than $12600 a tonne, the highest level since March 2019.

According to data disclosed by the China Automobile Association, lithium iron phosphate batteries produced a total of 950 million watt hours from January to February, accounting for 44.3% of the total output, an increase of 624.2% over the same period last year.

Huachuang Securities said that the rise in the price of lithium carbonate is mainly due to the imbalance between supply and demand. From a supply point of view, the shortage of ore resources is one of the main factors leading to the rise in prices, with a supply-demand gap of 20% and 25% since the beginning of the year.

The price of lithium ore is expected to rise faster.

Qi Ding believes that the field of new energy power and energy storage will contribute to the main increase in demand for lithium. From 2021 to 2025, the global lithium demand will reach 434000 tons, 537000 tons, 649000 tons, 781000 tons and 924300 tons. Divided into four major application scenarios, the proportion of lithium demand in the power sector will increase from 40% to 60% in 2021-2025, the proportion of energy storage will increase from 7% to 10%, the share of 3C areas will drop from 15% to 9%, and the share of traditional areas will drop from 33% to 17%.

For new energy vehicles, the shift from "policy-driven" to "product-driven" is the core growth logic of domestic demand. Abroad, the "carbon emission fine + high subsidy" drives the growth of new energy vehicles in Europe, and carbon emission fines are still expected to be stricter in the future. At the same time, under the background of carbon neutralization, the growth space of energy storage lithium electricity can be expected.

From the supply side, the tight balance between supply and demand will be basically continued from 2021 to 2023. Australia's new production capacity still needs higher price incentives, the new supply is mainly built capacity. Affected by the epidemic, the production of new capacity in South American Salt Lake has been fully delayed, and the progress of production has been lower than expected. Although domestic lithium mines and salt lakes have some capital expenditure in the early stage, the incremental impact is relatively small.

Guotai Junan estimates that the demand of the lithium industry in 2021 will be 430000-520000 tons, and the output of the maximum energy release will be 540000 tons, and the supply and demand of the lithium industry will be in tight balance in 2021. If demand exceeds expectations, or replenishment / scheduling exceeds expectations, supply is likely to fall short of demand in 2021, and lithium resources are the biggest deficiency. The supply of lithium concentrate will be tight in 2021, supporting the rising price of lithium salt.

Qi Ding believes that thanks to the continued tightening trend of the overall balance of supply and demand, the price of lithium salt will continue to rise in 2021, but lithium ore is relatively stagnant. Lithium mine prices are expected to accelerate, and the increase and sustainability are expected to exceed market expectations. The lithium ore target with high resource self-sufficiency rate and strong expectation of mine merger and acquisition is worthy of attention.