Summary
Recently, the price of lithium carbonate has become the subject of market attention, as it is approaching the threshold of $500,000. Is it a "pass-through success" or a "knock-out"? Differences remain within the industry。
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Recently, the price of lithium carbonate has become a subject of market concern, as it is approaching the threshold of $500,000. Is it a "pass-through success" or a "knock-out"? Differences remain within the industry。
The daily economics journalist contacted two lithium companies, none of which had more than $500,000 per ton. However, lithium companies still have strong expectations. Given the pace of feedback from their downstream clients, the strong price of lithium is now related to the expectations of future discharges from downstream material plants and battery plants, while there are expectations of demand and discharges in the third and fourth quarters of this year, requiring pre-positioning of raw materials. On the other hand, the second half of the year was also characterized by a high consumption of electric vehicles and stronger end demand。
Reserve materials for the second half of the year
According to shanghai steel union data on 23 august, the industrial-grade lithium carbonate rose by 0. 3 million to 475. 5 million yuan/t, and the battery-grade lithium carbonate by 0. 25 million to 487. 5 million yuan/t。
Lithium carbonate maintained its upward trend, which benefited the capital market-related segments of the stock. Just on 22 august, the first-ever lithium industry (sz00246 with a stock price of $121. 07 and a market value of 1987 billion) was blocked。
It is not hard to see that the current price of lithium carbonate is approaching the threshold of $500,000 per ton. There are divergent views within industry as to whether the price of lithium carbonate can break this threshold in the future。
According to choi dong-soo, secretary-general of the national motor market information consortium, the price of lithium would be approximately $470,000 to $500,000 per ton, with little chance of exceeding $500,000. Choi dong-ho judged that lithium mining resources were sufficient, that new energy vehicles would be less constrained by lithium prices in the coming months and that sales would continue to grow strongly。
According to choi dong-sook, the increase in lithium prices in the last two years was due mainly to the expansion of the demand side more easily than the supply side. Battery capacity expansion on the demand side is usually faster, while expansion of capacity in lithium mining is constrained first by capacity assessment, environmental assessment, mining licences, chemical parks and tailings disposal; second, there is also greater uncertainty about exploration and risk-seeking; and third, major mining projects abroad have a number of uncontrollable factors. The combination of these causes makes the availability of lithium less rapid。
On 23 august, a journalist for the daily economic news interviewed choi dong-soo through twitter. “a little more than 50 (if the price of lithium carbonate exceeds half a million yuan per ton) is also of little impact, and should be resource-rich, just a goof.” choi dong-soo indicates that the price of lithium carbonate will not increase indefinitely。
On 23 august, journalists also contacted two lithium salt companies for updated offers。
“the spot is $470,000 to $500,000 per ton, which is the price for the last two days.” a source from the lithium salt lake company told journalists。
“it is now $460,000 per ton ~ $470,000, which is not yet 50 million.” lithium operators have indicated that the strong reasons for the price of lithium are now linked to the expected discharge of downstream material and battery plants, while there are expectations of demand and discharges in the third and fourth quarters of this year, requiring pre-positioning of raw materials. On the other hand, the second half of the year was also characterized by a high consumption of electric vehicles and stronger end demand。
Increased lithium price "respond" to lithium corporate financials
Indeed, in recent times, the price of lithium has increased or has also been affected by upstream and phased supply constraints。
However, from the point of view of supply, the industry does not consider supply constraints to be the main reason for the increase in lithium prices。
A senior member of the lithium industry shared with the daily economic news reporter one of his shared views that the current high price of lithium carbonate does not in fact reflect the true supply-demand relationship, as most of the demand and supply are implemented at the lta price, and only a fraction of the deal is made at high spot prices. The actual discharge of lithium mine supplies was mismatched, resulting in a partial supply of time and an increase in lithium prices. The increasing trend in resource prices, sale by sellers, buyers' hoarding, brokers' hoarding, etc., has led to the possibility that real rapid supply tightening may be problematic when the market misreads the supply side; and the growth of the electric motor vehicle market beyond expectations seems to confirm the judgement of the market that the supply is inadequate, thereby triggering the price of lithium carbonate to “strand up”。
However, although there is no consistent answer to future price judgements, the benefits of resource increases have been reflected in the financial statements of lithium companies for the first half of the year。
On 22 august, a semi-annual report for 2022 was issued on the meltage share (sz002192, at a value of $127. 96 and a market value of $33. 23 billion). In the first half of 2022, the company achieved an operating income of 987 million yuan, an increase of 194. 44 per cent over the same period, and net profit of 576 million yuan to the mother, an increase of 4443. 99 per cent over the same period。
In response, the company noted that the growth of the new energy sector, the strong market demand for lithium and lithium equipment, and the rising prices of lithium and its products had a positive impact on the company's performance in lithium mining, lithium salt processing and smelting, and lithium equipment manufacturing。
In the first half of the year, income from operations in the tibetan mining industry (sz000408, with a stock price of $32. 18 and a market value of $50. 860 billion) increased by 218. 53 per cent over the same period, and net profits to mothers increased by 438. 01 per cent over the same period. In the first half of the year, the mĀori rate of company potassium chloride was 73. 10 per cent, and the mĀori rate of lithium carbonate was as high as 90. 52 per cent。
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