① Regarding the rumor about the discontinuation of lithium mine production in Jiangxi, Ningde Times told the Finance Association reporter that according to the recent lithium carbonate market situation, the company plans to adjust the lithium carbonate production schedule in Yichun; ② People familiar with the matter told the Financial Federation reporter that Ningde Era's ongoing initiatives need further communication and coordination before making a decision; ③ industry insiders analyzed that the shutdown of production at this point in time was mainly due to cost.
Financial Services Association, September 11 (Reporters Zeng Chu Chu and Liu Yue) Today, there are market rumors that the Ningde Era (300750.SZ) lithium mica ore processing in Yichun, Jiangxi will stop all production. All three smelters will stop production in about a week, affecting monthly production of more than 5,000 tons. In response, Ningde Times told the Finance Association reporter that according to the recent lithium carbonate market situation, the company plans to adjust the lithium carbonate production schedule in Yichun.
Another person familiar with the matter told the Financial Federation reporter that the measures in the Ningde era have not stopped yet, and will need further communication and coordination before making a decision. According to Tianyan Research, judging from the equity structure, Yichun Times New Energy Mining Co., Ltd., which is mainly responsible for mining, has 65% and 35% of the shares each held by Yichun Times, a wholly-owned subsidiary of Ningde Times, and Yichun Mining Co., Ltd. is a subsidiary of the Yichun State-owned Assets Administration Commission.
According to the person familiar with the matter mentioned above, the Ningde Era chose to stop production at this point in time. According to their understanding, the cash cost of the Ningde Era (of the project product) was around 0.09 million yuan/ton. Furthermore, the project invested heavily, and calculated as fixed investment depreciation, the total cost was even higher. According to data from the Shanghai Steel Union, today's battery-grade lithium carbonate price is 1,000 yuan higher than the previous day, with an average price of 0.0735 million yuan/ton.
Zhang Jinhui, a senior researcher at Xinyi Information, said in an interview with a reporter from the Financial Federation that production was mainly due to cost issues. Currently, apart from extracting lithium from salt lakes, other lithium mines are basically unprofitable. Most mining losses are unsustainable, and a return to reasonable profits later is inevitable.
Regarding the rumor that the Ningde Era mineral processing plant was discontinued, a person related to Longpan Technology (603906.SH) told the Financial Federation reporter, “This is also a good thing for our listed companies as a whole. As the price of lithium carbonate rises, the price of lithium iron phosphate has not dropped.” According to reports, Yichun Longpan Era, with Ningde Times and Longpan Technology holding 30% and 70% of the shares respectively, is the main company where Longpan Technology and Ningde Times have cooperated to build a lithium carbonate project. Earlier in May, a person from the company's securities department told the Financial Federation reporter that the mining resources for the project were stably supplied by Ningde Era's Jiaxiawo mining area in Fengxin County.
“All of the previous mines were supplied by them. This (discontinuation of production) news only came out last night, and our factory is still operating normally today.” The aforementioned person from Lung ?$#@$ Technology said.
Currently, 4 production lines have been built during the Yichun Longpan Era, with an annual production capacity of about 0.03 million tons, all at full production. “If he (Ningde) doesn't mine, we will also find alternative sources. If not, we may also temporarily carry out some maintenance and rectification.” The company source mentioned above said.
Judging from the impact of this shutdown, lithium carbonate futures and spot prices have both risen, spurred by the “Ningde Era Yichun Lithium Mine Production Discontinuation” news. Today, LC2411, the main futures contract, rose by more than 9%; spot prices also reversed the decline. According to data from the Shanghai Steel Union, the price of battery-grade lithium carbonate rose 1,000 yuan compared to the previous day. According to data from Longzhong News, the mainstream price of battery-grade lithium carbonate in August was 0.077 million yuan/ton, down 12.5% from the previous month.
The secondary market reacted violently. The lithium ore sector experienced a sharp rise after a long absence. The “two heroes of the lithium industry” Tianqi Lithium (002466.SZ) and Ganfeng Lithium (002460.SZ) both rose and stopped, Jinyuan (000546.SZ), and China Mining Resources (002738.SZ), Rongjie (002192.SZ), and Yongxing Materials (002756.SZ) all closed up more than 6%.
Some industry insiders said that if supply is reduced and demand remains the same, prices will definitely rise, but it's hard to say how much they can increase later. Currently, the lithium carbonate industry continues to be oversupplied. Domestic NEV sales are relatively good, but overseas NEV demand falls short of expectations.
Judging from the layout of the Ningde era in Yichun, since obtaining prospecting rights in the Jianxiawo mining area in 2022, the Ningde era also “strong alliances” with other companies to increase the layout of Yichun. In just two years, Ningde Times set up joint ventures with many Jiangxi lithium companies such as Jiuling Lithium, Zhicun Lithium, and Yongxing New Energy, a subsidiary of Yongxing Materials. At the same time, it also teamed up with Jiangsu's Longpan Technology and Tianhua New Energy (300390.SZ) to lay out upstream lithium batteries in Yichun.
According to public disclosure, the raw ore processing scale for the Fengxin Era Porcelain Stone Mine (containing lithium) Comprehensive Utilization Project, a subsidiary of Ningde Times, is 33 million tons/year. On the smelting side, production lines have now been completed and put into operation in the Ningde Era, including 0.04 million tons/year in the Longpan Era (0.03 million tons/year, according to reports), 0.03 million tons/year in the Fengxin Era, and 0.025 million tons/year in Tianyi Lithium.
In fact, the news that the Yichun lithium mine will stop production has been announced for a long time. As early as the beginning of this year, there were media reports that since the price of lithium carbonate had broken through the cost line of the vast majority of companies, a large number of lithium-related companies in Yichun had already stopped production, and companies that are still open for business have also drastically reduced production capacity. Compared with the price of around 0.1 million yuan/ton at the beginning of the year, the price of battery-grade lithium carbonate has dropped by about 25% since this year.