Demand continues to rise, supply of lithium resources tightens
With the rapid development of the new energy vehicle market, the demand for lithium-ion batteries continues to rise. The agency pointed out that the supply of lithium resources is in a state of tension, and industry chain companies are competing for lithium resources. At the same time, upstream companies with lithium resources extend their industrial chains downstream.
Lithium product prices rise
According to data from Shanghai Nonferrous Metals Network, from November 15th to 19th, the price of lithium carbonate rose slightly. The price of SMM battery grade lithium carbonate is 197,000-200,000 yuan / ton, and the average price is up 2,000 yuan / ton from last week. The price of SMM industrial grade lithium carbonate is 188,000-191,000 yuan / ton, and the average price is up 2,500 yuan / ton from last week.
In terms of lithium hydroxide, the mainstream quotation range in the domestic market is concentrated at 190,000-208,000 yuan / ton, and the transaction price is basically around 190,000 yuan / ton. The price of SMM battery-grade lithium hydroxide (coarse particles) is 185,000-191,000 yuan/ton, the price of SMM battery-grade lithium hydroxide (fine powder) is 192,000-199,000 yuan/ton, and the price of SMM industrial grade lithium hydroxide is 178,000-182,000 yuan / ton, the average price increased by 1,500 yuan / ton from last week.
Shanghai Nonferrous Metals Network pointed out that the recent trading volume of industrial-grade lithium carbonate is relatively large, and traders are mainly picking up the goods. The supply of battery-grade lithium carbonate is limited, and transactions have been sporadic recently. From a fundamental point of view, there may be a supply gap of about 16 percent for lithium carbonate in the past two months, but the material factory has cleared inventory and traders have released goods or eased the supply pressure. It is expected that the price will still rise slightly.
Guotai Junan Securities believes that stockpiling before the year will be the catalyst for the third rise in lithium prices. In 2022, lithium supply is expected to increase by 33 percent -35 percent , but downstream cathode and battery companies generally double their production plans, and the increase in supply can be fully covered by demand.
Supply and demand are tense
According to data from the China Passenger Transport Association, wholesale sales of new energy passenger vehicles reached 368,000 units in October, up 6.3 percent month-on-month and 148.1 percent year-on-year. From January to October, the wholesale sales of new energy passenger vehicles reached 2.381 million units, a year-on-year increase of 204.3 percent . In October, retail sales of new energy passenger vehicles reached 321,000 units, a year-on-year increase of 141.1 percent and a month-on-month decrease of 3.9 percent . From January to October, the retail sales of new energy vehicles was 2.139 million, a year-on-year increase of 191.9 percent .
The China Passenger Car Association pointed out that the epidemic has caused the automobile industry chain to be incomplete, and problems have been encountered in automobile production. In October, the supply of chips rose by about 10 percent month-on-month, and it is expected that sales of new energy vehicles will still increase by millions in 2022.
According to data from my country's Automotive Power Li{{{{30}}}}ion Battery Industry Innovation Alliance, in October 2021, my country's power lithium-ion battery output totaled 25.1GWh, a year-on-year increase of 191.6 percent and a month-on{{10}}month increase of 8.4 percent . Among them, the output of ternary batteries was 9.2GWh, accounting for 36.6 percent of the total output, an increase of 93.5 percent year-on-year and a decrease of 4.5 percent month-on-month; the output of lithium iron phosphate batteries was 15.9GWh, accounting for 63.3 percent of the total output, an increase of 314.0 percent year-on-year and a month-on-month increase of 17.6 percent . From January to October, my country's power lithium-ion battery output was 159.8GWh, a year-on-year increase of 250.0 percent . Among them, the output of ternary batteries was 72.0GWh, accounting for 45.1 percent of the total output, an increase of 165.0 percent year-on-year; the output of lithium iron phosphate batteries was 87.5Wh, accounting for 54.8 percent of the total output, an increase of 378.2 percent year-on-year.
According to relevant research reports, from 2018 to the first half of 2020, excess production in the lithium industry led to the accumulation of inventories. It is estimated that more than 50 percent of the lithium concentrate inventories have been digested. The actual increase in supply next year may not reach 180,000 tons. The tightness of supply in the lithium industry in 2022 may be higher than in 2021.
Extend the industrial chain
It has become a trend for upstream lithium mining companies to extend to the middle and lower reaches.
Mineral Resources' recent shareholders' meeting minutes show that the company will take back 100 percent of Ganfeng Lithium's underwriting rights in the Mount Marion project. A reporter from my country Securities News learned from Ganfeng Lithium that Ganfeng Lithium and Mineral Resources each hold 50 percent of the shares in the Mount Marion project, and Mineral Resources plans to extend their business downstream.
Ganfeng Lithium's semi-annual report shows that the company's current important lithium resource is the Mount Marion project in Australia. The relevant person in charge of Ganfeng Lithium Industry said that the project accounts for a large proportion of the company's raw material supply, about 70 percent -80 percent , but the company's layout of lithium mines in many regions can basically guarantee the company's raw material supply.
Currently, Ganfeng Lithium holds a 28.88 percent stake in Bacanora and a 50 percent stake in the Sonora Lithium Clay Project. At the same time, the company plans to acquire the remaining shares of Bacanora through a tender offer to further increase its shareholding ratio.
In addition, in order to speed up the construction of the Cauchari-Olaroz Salt Lake Project in Argentina, Ganfeng Lithium has arranged technical experts to go to Argentina in batches to support the project construction and ensure that the project will be put into operation in 2022. It is worth noting that the company is also deploying lithium ore resources in Mali, Africa, and indirectly holds the rights and interests of the Goulamina spodumene project through the acquisition of a 50 percent stake in the Dutch SPV company and obtains the underwriting rights.
Recently, the competition for lithium ore resources is hot. On November 17, Americas Lithium announced that it had agreed to acquire Millennium Lithium for 400 million. The price is about 34 percent higher than the previous quotation of about US299 million by CATL, and nearly 43 percent higher than the quotation of Ganfeng Lithium.
According to public information, the important assets of Millennium Lithium are the Pastos Grandes Lithium Salt Lake Project and the Cauchari East Lithium Salt Lake Project in Argentina.
Pacific Securities said that the upgrade of the Millennium Lithium acquisition war highlights the importance of lithium resources, and the upstream and downstream of the industrial chain are actively planning the layout, and resources will be the most important part of the industrial chain.
