Zhitong Financial APP learned that the spot price of battery-grade lithium carbonate rose 1500 yuan / ton to 473000 yuan / ton, a three-month high, according to Shanghai Nonferrous Network monitoring. The price of battery-grade lithium carbonate has continued to rise slightly since late July. CITIC research newspaper pointed out that Australian lithium concentrate production increased significantly in the second quarter of 2022, but disturbing factors such as declining ore grade and labor shortage still exist. The price of Australian lithium concentrate has risen to US $7000 per ton since July, driving up the cost of domestic lithium salt production. Under the cost support, the certainty of the rise in lithium prices in the second half of the year is higher. The sharp rise in the price of lithium concentrate makes the protection of lithium raw materials more and more important. it is suggested to pay attention to the enterprises with high self-sufficiency rate of lithium resources.
The investigation of Shanghai Nonferrous Network shows that the cycle of lithium concentrate mining at the resource end is long, and the rate of resource release in the short term is lower than the expansion rate of downstream lithium demand. Australian lithium miner Pilbara again sold for $6350 a tonne at the spodumene concentrate auction on Aug. 2, up 2.6% from the previous auction, supporting the high price of lithium concentrate.
On the supply side, lithium carbonate imports are expected to return to normal in July, Australian lithium ore grade is reduced to increase production, but the actual increase is limited, the grade and output of some mines have declined. Due to factors such as declining ore grades and labor shortages, production of Mt Cattlin and Mt Marion projects fell less than expected in the second quarter, with Mt Cattlin lithium production falling 61 per cent year-on-year. As one of the most important independent lithium concentrate producers in the market, the decline in the output of Mt Cattlin lithium ore has a prominent impact on the overall supply of lithium concentrate. Lithium concentrate prices for Mt Cattlin and Pilbara were $4992 and $4267 per tonne respectively in the second quarter, up 129 per cent and 61 per cent respectively from the previous quarter. Pilbara's auction price for lithium concentrate has exceeded $7000 per ton since July, indicating a continuing tight supply in the lithium concentrate market.
On the demand side, there is a strong consumer demand in the electric car market, and the demand for power battery raw materials is greatly increased. According to the Ministry of Industry and Information Technology, China's lithium carbonate output in the first half of the year was 168000 tons, an increase of 42.4 percent over the same period last year. Retail sales of new energy passenger vehicles in China reached 486000 in July, up 117.3% from January to July, up 121.5% from January to July, according to the Federation of passengers. Based on the good performance of new energy vehicles, the Federation announced that it would raise its forecast for sales of new energy vehicles for the whole year, raising its previous forecast of 5.5 million new energy passenger vehicles by 500000 to 6 million. According to Cui Dongshu, this target may still need to be raised again in the fourth quarter.
Generally speaking, the supply and demand of lithium is tight in the third quarter, and the supply will be more tight in the fourth quarter.
In the past two years, the global sales of electric vehicles have soared, which has triggered a hot demand for power batteries, and the price of upstream raw materials has also gone up, especially lithium. Taking lithium carbonate as an example, it is about 40, 000 yuan / ton in 2020, which has been soaring since 2021, of which battery-grade lithium carbonate has continued to rise from 72000 yuan / ton at the beginning of 2021 to about 480000 yuan / ton today.
With the soaring demand for raw materials for power batteries, soaring prices have brought tremendous pressure on enterprises in the industrial chain. Power battery manufacturers and vehicle manufacturers have "complained" one after another.Upstream lithium miners are doing well.For example, Tianqi Lithium Industry expects its first-half net profit to be 9.6 billion-11.6 billion yuan, an increase of more than 110 times compared with the same period last year; Ganfeng Lithium predicts that its first-half net profit will be 7.2 billion-9 billion yuan, an increase of 40.5 times over the same period last year.
Huge profits in the field of upstream raw materials are attracting all kinds of capital to enter the market.Even chemical enterprises, real estate enterprises and so on are trying to get a piece of the pie, not to mention battery manufacturers and automobile manufacturers who are already in the game, whether it is to reduce costs, or in order to comply with the general trend of the development of the industry and ensure the supply of raw materials, "ore grabbing" is imperative.
From the beginning of 2021 to the end of June 2022, car companies have invested in 21 raw materials upstream of batteries, of which 16 have invested in the lithium industry, including direct stakes in mining companies or mining projects, as well as short-term or long-term supply contracts. These participating manufacturers include BMW, Volkswagen Group, General Motors Co, Ford, Tesla, Inc., Renault, Toyota, BYD and so on.
Compared with car companies, battery manufacturers have a stronger sense of crisis and urgency. Ningde era, BYD, LG New Energy and other manufacturers compete to buy mines, mining, lock ore. On January 13 this year, BYD won the lithium mining contract of the Chilean Ministry of Mines and won a total of 80,000 tons of lithium mining quota. In recent years, Ningde era has successively invested in North American lithium industry (NAL), Canada NeoLithium, Australia Pilbara Mining and other companies.
CITIC research newspaper pointed out that Australian lithium concentrate production increased significantly in the second quarter of 2022, but disturbing factors such as declining ore grade and labor shortage still exist. The price of Australian lithium concentrate has risen to US $7000 per ton since July, driving up the cost of domestic lithium salt production. Under the cost support, the certainty of the rise in lithium prices in the second half of the year is higher. The sharp rise in the price of lithium concentrate makes the protection of lithium raw materials more and more important. it is suggested to pay attention to the enterprises with high self-sufficiency rate of lithium resources.
Everbright Securities believes that the high price of lithium concentrate is still good for enterprises with high self-sufficiency of lithium resources. It is suggested to pay attention to Tianqi lithium industry, Ganfeng Lithium, Rongjie shares and China Mineral Resources; the geopolitical risks of overseas resources still exist for a long time, and domestic independent and controllable lithium resources are of great strategic significance. It is suggested to pay attention to Shengxin Lithium Energy, Ya Hua Group, Salt Lake shares, which distribute domestic lithium resources.
Related concept stocks:
Tianqi Lithium Industry (002466.SZ): lithium mining leader, holding 23.75% of foreign mining SQM company, SQM's mine may reach 180000 tons of lithium carbonate and 30,000 tons of lithium hydroxide production capacity in 2022. In addition, Terrison concentrate has a production capacity of 1.62 million tons per year in 2021, and Tianqi Lithium holds a 26.01% interest.
Ganfeng Lithium (002460.SZ): lithium mine leader, Ganfeng Lithium announced on the evening of July 11 that his wholly-owned subsidiary intends to acquire no more than 100% of Lithea, with a total consideration of no more than $962 million (about 6.4 billion yuan).
Tibet Mining (000762.SZ): the company plans to produce 9500 tons of lithium concentrate in 2022, it said on the investor interactive platform on Aug. 8. With the promotion of Baowu, the development of Zabuye Salt Lake has been accelerated.
Rongjie Co., Ltd. (002192.SZ): the raw mineral energy of lithium mine is 1.05 million tons / year, and the capacity of refined minerals is 450000 tons / year. The existing production capacity of battery-grade lithium carbonate is 3000 tons / year and lithium hydroxide is 1800 tons / year. 002497.SZ: in response to investors' questions on the interactive platform on July 11, the company said that the company's comprehensive lithium salt production capacity will reach 73000 tons after the first phase of Ya'an Lithium Industry Phase II construction project is put into production at the end of this year.
Shengxin Lithium Energy (002240.SZ): subsidiary Oyino Mining has the mining right of Yilonggou in Jinchuan County, Sichuan Province, with proven reserves of 275400 tons of LCE. The project was put into production in 2019 and the current annual production capacity of 405000 tons of raw ore. Indonesia Shengxin is building an annual production capacity of 60,000 tons of lithium salt in Indonesia's Central Sulawesi Province, which is expected to be completed and put into production in 2023. The company recently said on the interactive platform that Sui Ningsheng's new 30,000-ton lithium salt project is now close to the design capacity.