The Zhitong Finance App learned that China Post Securities released a research report saying that the PLS announcement had accepted the offer before the BMX auction. The price of 5,000 tons of lithium concentrate was 1106 US dollars/ton SC5.5, equivalent to 1,200 US dollars/ton SC6, and the equivalent cost of lithium carbonate was about 106,000 yuan/ton. A sales contract has been signed with the buyer and shipped in 2024Q4. In terms of the domestic market, judging from the production schedule, the downstream battery industry is booming. The March production schedule continued to grow month-on-month, and the April production schedule is still improving after learning about the industry chain. In addition, the industry was previously in a state of low inventory, and some manufacturers overhauled, cut production and stopped production during the Spring Festival, so as downstream demand picked up, demand for inventory replenishment was strong in the short term. China Post Securities believes that the inflection point of lithium carbonate is prominent, and priority is given to recommending lithium ore.
Recommended attention: Tianqi Lithium (002466.SZ), Ganfeng Lithium (002460.SZ), China Mining (002738.SZ), Yongxing Materials (002756.SZ), Zangge Mining (000408.SZ), Chuaneng Power (000155.SZ), Yahua Group (002497.SZ), Shengxin Lithium (002240.SZ), Tianhua Xinneng (300390.SZ) and other leading domestic lithium industry companies.
Lithium prices fluctuate, and mining companies lock in production to guarantee sales
This auction is in addition to the underwriting, and the company said most of the production will be distributed in 2024. Earlier, Pilbara announced that it signed a lithium concentrate contract agreement with Yahua Group and Shengxin Lithium Energy. (1) Pilbara will supply 20,000 tons of lithium concentrate to Yahua in 2024, and Pilbara can supply an additional 80,000 tons; Pilbara will supply 100,000 tons of lithium concentrate every year from 2025 to 2026, and Pilbara can supply an additional 60,000 tons. (2) Pilbara will supply 85,000 tons of spodumene concentrate to Shengxin Lithium in 2024, 150,000 tons of spodumene concentrate in 2025, and 150,000 tons of spodumene concentrate in 2026.
Overseas lithium mine production began to cut, and the increase in supply fell short of expectations
(1) Greenbush: An SC6.0 grade spodumene concentrate converted to 1.3 million to 1.4 million tons/year (previously 1.4 million to 1.5 million tons/year) under IGO's FY24 production guidelines.
(2) AMG: The lithium concentrate plant in Brazil has been temporarily shut down. The annual output is expected to be 93,000 tons in 2024, and it will operate at a fully expanded capacity rate in 2024 Q4, that is, 130,000 tons per year.
(3) Arcadium: Due to cost pressure, the Mt Cattlin mine's spodumene concentrate production in 2024 is expected to drop from 205,000 tons in 2023 to 130,000 tons.
(4) Core Lithium also announced that it will temporarily stop mining operations at the Grants open pit in the Finniss project in the Northern Territory. Previously, the 2024 lithium concentrate production guideline was 80,000 to 90,000 tons.
Demand for downstream inventory replenishment continues, supporting lithium prices
Judging from the production schedule, the downstream battery industry is improving. The March production schedule continued to grow month-on-month, and the April production schedule is still improving after learning about the industry chain. In addition, the industry was previously in a state of low inventory, and some manufacturers overhauled, cut production and stopped production during the Spring Festival, so as downstream demand picked up, demand for inventory replenishment was strong in the short term. On the policy side, the fourth meeting of the Central Committee on Finance and Economics proposed “promoting trade-in of consumer goods”. On March 2, the Shanghai government announced a subsidy of 10,000 yuan for trade-in purchases of pure electric vehicles in 2024. Follow-up with other provinces and cities is also worth looking forward to.
Risk warning:
Downstream demand falls short of expectations; risk of fluctuations in raw material prices; risk of increased industry competition; risk of domestic and foreign policy changes.