The development momentum of the new energy automobile industry is still strong! According to the China Automobile Association, in April 2023, the production and sales of new energy vehicles will be 640,000 and 636,000 respectively, an increase of 1.1 times year-on-year, and the market share will reach 29.5%. This has led to a substantial increase in demand for power batteries and an increase in the price of lithium carbonate, the main raw material for power batteries.
Optimistic about the huge development prospects of the industry, recently, the two giants of lithium mines announced the expansion of production at the same time. So, does this mean that the price of lithium carbonate is close to a low level and the price will continue to rise?
Two leading officials announce new projects
On the evening of May 12, both Ganfeng Lithium Industry and Tianqi Lithium Industry disclosed in their announcements that they plan to increase the lithium battery industry chain.
Among them, Ganfeng Lithium Industry stated that Jiangxi Ganfeng Lithium Technology Co., Ltd., a subsidiary of the company, intends to sign an investment agreement with the Xiangyang government. Ganfeng Lithium will invest 2.5 billion yuan to invest in the construction of new energy lithium battery production and research projects in Xiangyang City.
The announcement shows that Ganfeng Lithium Industry plans to build a new energy lithium battery production research and development project, and the first phase will build a new energy lithium battery cell + Pack packaging production base with an annual output of 5GWh. The project is scheduled to enter the site in May 2023 and is expected to be put into operation by the end of December 2023.
In addition, Ganfeng Lithium also released new project investment announcements on January 19 and April 25 this year. In the announcement on January 19, Ganfeng Lithium Industry stated that the company plans to invest in the construction of a new lithium battery and energy storage headquarters project with an annual output of 10GWh in Dongguan City, Guangdong Province, with a planned total investment of 5 billion yuan. At the same time, invest in the construction of a power battery project with an annual output of 24GWh in Fuling High-tech Zone, Chongqing, with a planned total investment of 10 billion yuan.
On April 25, the company announced that its subsidiary Ganfeng Lithium Battery will invest in a new energy lithium battery production and R&D project in Xiangyang City, Hubei Province. On the afternoon of May 8, Xiangyang Municipal Government and Ganfeng Lithium Battery held a signing ceremony for a strategic cooperation agreement. According to the content of the agreement, Ganfeng Lithium Battery will invest 10 billion yuan in Dongjin New District to build a 20GWh new energy lithium battery production research and development project. The two parties will also cooperate in the field of recycling, and build waste lithium battery cascade utilization and dismantling recycling projects according to subsequent market conditions.
Also on May 12, Tianqi Lithium Industry announced that the company agreed to build a battery-grade lithium hydroxide production base in Zhangjiagang Free Trade Zone, Suzhou City, Jiangsu Province, and signed an "Investment Agreement" with the Zhangjiagang Free Trade Zone Management Committee of Jiangsu Province.
The total investment of the project is about 3 billion yuan, of which the total investment of the first phase project with an annual output of 30,000 tons of battery-grade lithium hydroxide monohydrate will not exceed 2 billion yuan, including the main product battery-grade lithium hydroxide monohydrate and by-product sodium sulfate . Suzhou New Energy, the main body of the project implementation, is a wholly-owned subsidiary of Chengdu Tianqi, a wholly-owned subsidiary of Tianqi Lithium Industry.
Tianqi Lithium expects that after the completion of the first phase of the project, the annual new sales revenue will reach 5.533 billion yuan, the annual new net profit will be 1.09 billion yuan, and the total investment yield will be 73.92%.
Lithium carbonate prices continue to rise
It is understood that at the beginning of 2021, the price of lithium carbonate per ton is only about 50,000 yuan/ton, and it will rise to 100,000 yuan/ton in August 2021. In mid-November 2022, the price of lithium carbonate once approached the 600,000 yuan/ton mark.
Since the beginning of this year, the price of lithium carbonate has been falling all the way, and by the end of April this year, it had fallen below 180,000 yuan/ton.
At the end of April, the price of lithium carbonate rose somewhat. According to the latest data released by Shanghai Steel Union on April 26, the average price of battery-grade lithium carbonate has been reported at 180,000 yuan/ton for three consecutive days. Its data shows that in the 10 trading days from April 27 to May 12, the price of battery-grade lithium carbonate has achieved ten consecutive rises. In just half a month, the price of lithium carbonate has increased by nearly 40%.
On May 15, according to the data released by the Shanghai Steel Federation, the battery-grade lithium carbonate rose by 17,500 yuan/ton that day, and the average price was 265,000 yuan/ton.
The latest quotation from Shanghai Nonferrous Metals Network shows that on May 15, lithium carbonate (99.5% battery grade/domestic) rose by 16,000 yuan to 258,000 yuan/ton, a record high of more than one month. 68000 yuan.
Auction prices for lithium mines also rebounded. On May 11, Lanke Lithium held an auction of industrial-grade lithium carbonate. The final transaction price of 600 tons of industrial-grade lithium carbonate was between 241,000 and 251,000 yuan/ton, which was not only nearly 20% higher than the average market price of the day, but also It surpassed the spot price of battery-grade lithium carbonate on that day.
In this regard, a reporter called Ganfeng Lithium Industry as an investor. The company said that it has always been optimistic about the prospects of the lithium battery industry and market demand. The rebound in the price of lithium carbonate has a positive impact on the company. Started production.
How will lithium prices develop in the future?
Regarding the reasons for the recent rebound in lithium carbonate prices, some insiders said that the recent continuous rise in lithium carbonate prices was mainly due to the large decline in the previous period. From the perspective of the entire industry, as a cyclical industry, price fluctuations are very normal. Although the fluctuations of lithium prices have indeed increased compared with the past in the past two years, it should be regarded as a healthy adjustment.
The Battery Alliance has noticed that the industry is still optimistic about the future development of lithium carbonate prices.
Hunan Yuneng recently received an institutional survey and said that in the first quarter of this year, the industry was affected by factors such as lithium carbonate price cuts and fuel vehicle price cuts, and the industry was under pressure to destock. As the overall inventory of the industry is gradually digested and the price of lithium carbonate returns to a reasonable range, it is believed that the market will gradually recover. The price of lithium carbonate is mainly affected by the relationship between market supply and demand and market sentiment. It is relatively complicated and fluctuations are normal. In the long run, the return of lithium carbonate price to a reasonable range is conducive to the long-term healthy development of the industry.
The recent research report of Pacific Securities mentioned that the current price of lithium carbonate has rebounded slightly, reflecting the upward trend in the production of power batteries and energy storage batteries in May and June. In the short term, it is expected that in the second quarter, with the recovery of downstream demand, the decline of wait-and-see sentiment and the restocking of enterprises, the industry prosperity is expected to usher in a rebound, which will drive the price of lithium carbonate to rebound. In the long run, the production capacity of lithium carbonate has begun to be released. In March, the annualized effective production capacity in China alone reached 560,000 tons, which is good for the industrial chain.
Huaan Securities pointed out that the decline of lithium carbonate accelerated in the early stage, and material factories were cautious in purchasing and took a wait-and-see attitude. However, as prices rebounded, lithium salt stocks were gradually being digested. In the medium and long term, there is still a gap between the supply and demand of lithium resources. Lithium resource companies can still enjoy the profits of high lithium prices. The high performance of the lithium sector is undervalued. It is recommended to pay attention to high-quality lithium resources with high self-supply rate, low-cost stable output and continuous expansion of production. Lithium standard. At the same time, as the price of lithium salts rises, the prosperity of the recycling industry chain begins to recover. Recycling companies are expected to increase their waste purchases and their profitability will steadily increase. It is recommended to pay attention to Guanghua Technology, Tianqi, and GEM, which are leading the channel layout of technology.
TrendForce believes that the destocking of Chinese power battery manufacturers is nearing completion, and the supply-demand relationship has gradually returned to normal after a quarter of market-oriented adjustments. At present, the price of battery materials is gradually stabilizing, and the market demand is growing steadily. China's power battery industry chain is showing signs of gradual recovery, and it is expected to usher in a full recovery in June.