Source of this article: Times Finance Author: Yuchen
Image source: Picture Worm
"They are expanding their production capacity, and the price of lithium carbonate can only be lower." In the stock bar, an investor said.
On the evening of June 30, Tibet Mining (000762. SZ) announced that the company's 10,000-ton battery-grade lithium carbonate project for the green comprehensive development and utilization of Zabuye Salt Lake in Tibet has started trial production from now on, and the construction of supporting energy facilities is also being promoted.
According to the announcement, the project adopts the process of "membrane separation + evaporation crystallization" to efficiently recover lithium, potassium and other resources in Zabuye Salt Lake, with a designed annual output of 9,600 tons of battery-grade lithium carbonate, 2,400 tons of industrial-grade lithium carbonate, 156,000 tons of by-product potassium chloride, and 200 tons of rubidium-cesium mixed salt.
According to a Bloomberg report on June 29, four new lithium mines in Argentina will be put on production in a few months, which will significantly increase Argentina's annual lithium production capacity by 79% to 202,000 metric tons.
According to the statistics of the Lithium Branch of the China Nonferrous Metals Industry Association, in May 2024, the national lithium carbonate output was about 52,900 tons, +5.3% month-on-month, and domestic production further recovered in May. From January to May this year, the cumulative output of lithium salts in mainland China increased by nearly 30% compared with the same period in 2023.
As one of the main lithium salts, lithium carbonate is an important raw material for lithium batteries and is known as "white oil". With the continuous emergence of new dynamics of lithium carbonate production capacity improvement at home and abroad, what kind of trend will "white oil" lithium carbonate come out of?
"100,000 yuan is a thing of the past"
Industry experts generally pointed out that "when the price of lithium carbonate can stop falling, the key lies in the sales trend of new energy vehicles." ”
Times Finance observed that in the first half of 2024, the sales of new energy vehicles will still show a growth trend. According to the latest data from the China Association of Automobile Manufacturers, from January to May 2024, the production and sales of new energy vehicles in mainland China will reach 3.926 million and 3.895 million respectively, an increase of 30.7% and 32.5% year-on-year, respectively. According to data from the China Business Industry Research Institute, from January to May 2024, the cumulative installed capacity of power batteries in mainland China was 160.5GWh, a year-on-year increase of 34.6%.
However, correspondingly, the price of lithium carbonate remained at a relatively low level, with the price fluctuating roughly around 100,000 yuan/ton, and even falling below 100,000 yuan/ton many times.
According to Shanghai Ganglian data, in the first half of 2024, the average price of domestic battery-grade lithium carbonate reached 114,000 yuan/ton in mid-March, and fell to 88,500 yuan/ton on July 1.
In terms of futures, in the first half of 2024, the main force of lithium carbonate will basically run between 90,000 and 120,000. As of the close of trading on July 2, the main lithium carbonate futures contract rose 1.72% to 88,500 yuan/ton.
In the past two years, the market price of lithium carbonate has soared to a peak of 600,000 yuan/ton. However, the market is changing, and now, looking back at that time, the price of 100,000 yuan/ton is "a thing of the past".
The sales of new energy vehicles are still growing, why are lithium carbonate prices falling one after another?
In this regard, Mo Ke, the founder of True Lithium Research, told Times Finance, "The main thing is that the destocking of new energy vehicles will reach about 2 million this year." Therefore, the increase in sales of new energy vehicles has not promoted the growth of production for the time being, resulting in limited growth in demand for lithium carbonate, which is significantly lower than the growth of lithium carbonate supply, so lithium prices are sluggish. ”
In the context of the continued low lithium price, some mining companies at home and abroad have decided to reduce production and stop production in order to "maintain prices".
On June 25, Zhicun Lithium issued a notice that two wholly-owned subsidiaries of the group will start from July 1, 2024, and carry out shutdown and maintenance of lithium carbonate production lines in a phased and orderly manner.
In the international market, Australia's Core Lithium, IGO, Galaxy and other mining companies have also issued statements that they will implement production reduction measures, involving projects such as Finniss, Mt Cattlin and Greenbushes, the world's largest lithium mine.
"At present, the overall supply of lithium carbonate is obviously in excess of demand, for specific projects, if the selling price is significantly lower than the cost, enterprises will consider taking measures to reduce production or stop production to reduce losses, thereby reducing the total supply of lithium resources, and then promoting the relationship between supply and demand to gradually return to a normal state. From this logical point of view, if the price of lithium carbonate continues to decline, the phenomenon of enterprises reducing production and stopping production will become more and more frequent, and vice versa. Mo Ke further said.
It will remain stable in the long termIt is worth noting that in addition to the core factor of supply and demand, information from all sides is also quietly affecting the price trend of lithium carbonate.
有媒体报道称,阿根廷四个新锂矿项目将在未来几周至几个月内陆续投产,这将使得阿根廷的锂年产能大幅增加79%,项目涉及青山控股和Eramet共同参与的Centenario Ratones、紫金矿业的Tres Quebradas、赣锋锂业的Mariana、韩国钢铁巨头浦项控股的Sal de Oro。
In fact, the commissioning of the Argentine project is not new to the industry.
"The increase in lithium deposits this year has been set very early on, and there will be no additional additions, and although there is news that the Argentine project will be coming on stream one after another, the actual release of production will not be so rapid and will not bring significant supply growth in the short term." Meng Xiangxu, a lithium carbonate analyst at Longzhong Information, told Times Finance.
Mo Ke also said that the news of production is more of an emotional impact on lithium carbonate prices.
"Lithium carbonate isn't going to be weak forever. Although the market may show weakness in the short term, and may even be volatile in the medium to long term, the overall trend of this market is positive in the longer term, whether based on policy guidance or the growth of downstream demand. Meng Xiangxu said.
On July 2, Corun (600478. SH) said in an interview with Times Finance that in the long run, lithium carbonate prices will remain stable. "On the whole, the automotive power battery and energy storage battery market maintains a high growth trend, and the demand for lithium is huge. At the same time, in the process of continuous price fluctuations, part of the high-cost production capacity will be cleared, and the relationship between supply and demand will be more balanced in the future. ”
"In addition, the development of all-solid-state batteries encouraged by the state will also bring growth opportunities to the lithium battery materials industry. The future commercialization of solid-state batteries will increase the current lithium consumption of lithium batteries from 0.8Kg/KWh-1Kg/KWh to nearly 2Kg/KWh, which also means that the amount of lithium will be doubled, thereby driving demand growth. Corun said.