Since the beginning of this year, lithium raw materials have recently stabilized after experiencing price fluctuations. In the past two months, the price of
battery-grade lithium carbonate has gone out of the "V" shape. On March 20, the average price of lithium carbonate was quoted at 300,000 yuan/ton, and fell to a low of 180,000 yuan/ton a month later. On May 31, it returned to the high level of 300,000 yuan/ton again. The price fluctuation time of China is only a short period of more than a month. As of July 3, data from Shanghai Steel Union showed that the average price of battery-grade lithium carbonate rose by 9,000 yuan/ton from the previous day to 315,000 yuan/ton.
Such rapid price fluctuations have triggered a series of chain reactions in the
lithium battery industry chain. When the average quotation of battery-grade lithium carbonate broke through the 300,000 yuan/ton mark, the industry once again aroused concerns about rising raw material prices.
"Destocking" cycle ends, supply and demand reverse
In the process of this round of lithium carbonate price reversal, the relationship between supply and demand is the dominant force behind it.
Some experts in the
power battery industry said that in 2022, the rush to install the new energy vehicle industry will cause the inventory of the entire lithium battery industry chain to be at a historically high level. In the first quarter of 2023, terminal demand will weaken, and the downstream of the lithium battery industry will enter the destocking stage.
Previously, when the price of battery-grade lithium carbonate fell below 200,000 yuan/ton, the transaction volume in the market dropped sharply. The reason was that the sales of new energy vehicles in the first quarter were not satisfactory, which led to a slowdown in demand. At the same time, the price of battery-grade lithium carbonate plummeted, and upstream sellers cut production and controlled shipments, resulting in a destocking of most of the spot market. However, with the increase in market demand, the downstream is gradually destocking, and the peak season for terminal consumption has arrived, and the downstream replenishment demand is released, which promotes the recovery of upstream market demand.
According to the analysis of the High-tech Industry Research Institute (GGII), judging from the delivery data in June, leading new energy vehicle manufacturers have significantly driven the overall auto market. BYD, GAC Aian, Ideal, Nezha, Leapao and other car companies that have delivered more than 10,000 vehicles have all achieved a delivery growth rate of over 10% month-on-month. On the whole, the production schedule of car companies in June has increased significantly month-on-month, and the growth rate is generally close to 10% to 20%.
It is reported that since mid-April, downstream vehicle companies have started to drive sentiment, and midstream battery manufacturers have also gradually replenished their inventories, which has driven the recovery of the lithium battery industry's production schedule. Judging from the performance of leading power battery companies in the first quarter of this year, it also reflects the current high prosperity of the power battery market.
Ningde era Q1 business increased by 82.91% year-on-year, and net profit increased by 557.97% year-on-year. The company revealed at the performance briefing that battery sales in the first quarter were higher than production, which helped reduce inventory. Yiwei Lithium Energy's Q1 performance was also good, with operating income increasing by 66.11% year-on-year, and net profit attributable to the parent company increasing by 118.68% year-on-year.
Capacity expansion is still the industry consensus.
Many lithium salt listed companies have recently announced expansion plans. In fact, many leading lithium mining companies have production capacity investment and production increase expectations in the second half of the year. Tianqi Lithium Industry disclosed in May that it plans to invest no more than 2 billion yuan in the construction of a 30,000-ton/year battery-grade lithium hydroxide monohydrate project. In June, Salt Lake Co., Ltd. announced that the 40,000-ton/year basic lithium-salt integration project started construction in Chaerhan Salt Lake. The total investment of the project is about 7.098 billion yuan.
Ganfeng Lithium announced that its Cauchari-Olaroz salt lake project in Argentina has produced the first batch of lithium carbonate products. The company expects that with subsequent capacity ramp-up and production line optimization, the project will gradually produce battery-grade products. In addition to the Argentina project, the Fengcheng project will also be put into operation.
In 2022, the price of lithium salt will be high, and the industry will have sufficient motivation to expand production. Many companies will release their production capacity in 2023. According to the completion and commissioning time given by many upstream enterprise projects last year, almost all of them will be completed and carried out within this year or next year. output.
The lithium resource projects of domestic battery factories have begun to enter the production stage. Ningde Times recently stated that the mass production of lepidolite mine in Jiangxi is progressing smoothly as a whole, and it is expected to be put into production in the middle of this year. In addition, Guoxuan Hi-Tech's 20,000-ton annual lithium carbonate project has been put into operation, with an annual output of 25,000 tons in the first phase, which is expected to be put into operation in the second quarter.
The industry expects that the mine supply constraints that have plagued the industry chain in the past two years will be significantly eased in the second half of the year, mainly manifested in the increase and commissioning of new world-class mines. It is estimated that the global lithium supply will reach 1.079 million tons and 1.472 million tons of LCE in 2023 and 2024, with year-on-year growth rates of 39.7% and 36.4%.
After the rapid rebound of lithium prices, the upstream and downstream of the industrial chain have entered the price game stage. At present, the demand in June is steadily improving, and the production schedule of downstream manufacturers continues to increase. The tight supply and demand make upstream manufacturers more willing to raise prices. The future trend of lithium prices must be influenced by many factors, which not only reflect the supply of upstream resources, but also have a certain relationship with the supply and demand relationship of midstream and downstream power batteries and new energy vehicle production and sales.
CITIC Construction Investment predicts that downstream demand will continue to pick up,
energy storage orders are relatively good, and five ministries and commissions will launch a new round of new energy vehicles to the countryside to promote the consumption of new energy vehicles. Therefore, consumption continues to improve, lithium prices are strongly supported, and lithium prices are expected to remain high.
It is worth mentioning that on June 14, Guangzhou Futures Exchange issued an announcement on public consultation on lithium carbonate futures and lithium carbonate options contracts and related rules, and publicly solicited opinions on lithium carbonate futures, options contracts and related rules. This measure will help domestic manufacturers balance the price fluctuations of lithium raw materials, and timely reflect the changes in supply and demand in my country's lithium salt spot market, thereby helping the lithium salt industry to effectively manage raw material price risks.
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