When it comes to price increases, it depends on lithium!

Battery-grade lithium carbonate rose 4000 yuan / ton, with an average price of 535500 yuan / ton, while battery-grade lithium hydroxide rose 5000 yuan / ton, with an average price of nearly 520000 yuan / ton, according to data from Shanghai Iron and Steel Federation on October 17.

In addition, on October 18, Pilbara announced that it had accepted a 10 per cent deposit on a pre-auction bid of $7100 a tonne ahead of the 10th auction because spodumene concentrate was temporarily undersupplied.

The auction price of lithium concentrate in September was US $6988 per ton, up 10% from the auction price in August, and the tax cost of lithium carbonate is about 510000 yuan per ton.

The upstream lithium ore supply is lower than expected.

The rising price of lithium concentrate is related to the expected increase in supply.

According to the statistics of Northeast Securities, nearly 40% of the new lithium mine projects overseas have been announced to be delayed in the near future, but it is difficult for the mines in production to exceed expectations, and the supply increment in the next two years may be much lower than market expectations, and it is expected that the industry is still in a tight balance between supply and demand.

In several major mines in Australia, Kathleen Vally, Mt.Holland and Bald Hill have not been produced this year. Among them, Pilbara's theoretical production capacity is 750000 tons of 6% spodumene. According to last year's plan, Pilbara was supposed to supply 680000 tonnes of 6 per cent spodumene to underwriters in 2022, but only 400000 tonnes were actually produced after the production guidelines were cut this year.

A senior adviser to an Australian lithium mining company predicts that by the end of this year, the price of 6 per cent spodumene FOB (FOB) is estimated at US $8000-9000 per tonne, so it is estimated that the production cost of lithium carbonate is about 550000-580000 yuan per ton.

In addition, recently, Salt Lake Co., Ltd., a major manufacturer of lithium extraction from Salt Lake, said on the investment interactive platform that the recent drop in temperature at the company's location has led to a decline in the company's lithium carbonate production. Huaxi Securities said that it can be seen that the production of lithium extraction from Salt Lake has indeed begun to reduce due to low temperature, and the supply side has therefore tightened.

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On the demand side, Huaxi Securities believes that the current peak season for the traditional consumption of gold, silver and ten new energy vehicles, the increase in new energy subsidy policies in Guangzhou, Beijing, Shenzhen and other places, and the introduction of a variety of preferential activities by major car companies during the National Day period, drive the car market to continue to heat up, and demand continues to rise.

It believes that under the demand for impulse stock from downstream manufacturers before the end of the year, the demand is expected to continue to rise, the pattern of supply falling short of demand will become increasingly fierce, and the price of lithium salt is expected to continue to rise.

CITIC also pointed out that sales of Xinneng cars reached a new high in September, and downstream manufacturers, for the impulse at the end of the year, were more active in purchasing in the fourth quarter, superimposed the impact of the epidemic in Qinghai, the transportation of lithium salt was blocked, and the operation of high lithium prices still had a strong support. It is expected that lithium prices will still have upward momentum during the year.

As for the company, the industry leaders' third-quarter results forecasts have been released one after another. Tianqi Lithium Industry's net profit in the first three quarters is expected to exceed 15 billion, an increase of more than 20 times over the same period last year. Similarly, Rongjie shares also have a substantial increase in net profit, which is expected to increase more than 40 times in the third quarter compared with the same period last year.

In addition, the performance of Ganfeng, Yongxing, Zangge and China Mining has increased by 4-6 times.

CITIC pointed out that the upward trend of lithium prices in the fourth quarter is expected to remain unchanged, lithium plate listed companies generally pre-increase in the third quarter, the current time point lithium plate is still the allocation window period.