Controversy And Resonance Behind The 16% Shock Of Lithium Plate: "Boom To Peak" Encountered Constraints

When the system falls, lithium stocks, which are already in a high position, cannot be avoided. Some leading stocks in the early stage have fallen by nearly 30%.

However, once the secondary market turns better, lithium stocks will retaliate.

Until July 29, Ningde times released sodium ion batteries and lithium sodium hybrid battery packs after hours, which did not have a significant impact on lithium stocks. The lithium index also completed a nearly 16% shock this week.

On July 30, Yahua group and jiangte Electric Machinery Co., Ltd. continued to trade, among which the latter increased by 390% in the year.

From the low point in October 2020, the company has risen by 932.8%, becoming a "quasi tenfold" stock in more than a year.

Why does lithium mine stocks including jiangte Electric Machinery Co., Ltd. perform so strongly?

Once the secondary market improves, lithium stocks will retaliate. IC photo

Price trend change

According to the research of 21st century economic reporter, the core of the current market lies in that although sodium ion battery may affect the long-term growth logic of lithium battery industry chain, the high point of short-term industry prosperity has not yet arrived.

Recently, the price of lithium salt products such as lithium concentrate and lithium carbonate has changed.

The quotation information from the business agency of the bulk commodity data company also shows that the price of lithium carbonate has begun to loosen recently, and some Jiangxi lithium mica extraction enterprises have "tentatively" raised the price to 92000 yuan / ton.

On the other hand, CITIC Securities and Guotai Junan, two leading securities companies, have recently collectively raised their expectations for lithium carbonate prices in the second half of the year. The former expects the lithium price to rise to 120000-150000 yuan / ton this round, while the latter "raises the lithium price forecast in the second half of the year to a record high of 180000 / T".

It should be pointed out that there is still no unified price guidance in the lithium salt market. Although some enterprises have increased their quotations, due to the limited actual trading volume, or even no transaction, the price is "virtual" and has not yet entered the stage of substantial price adjustment.

The reason why the seller is so optimistic about the further rise of lithium carbonate price lies in the relationship between supply and demand.

According to the 21st century economic report, in the second half of the year, new production capacity including lithium salt and lithium iron phosphate was released. The scale was not small, and the demand side was optimistic. However, the supply side was limited by the lag of Western Australia's capacity release. There was almost no definite increase in the second half of the year. However, domestic lithium mica and Salt Lake were unable to make up for the gap.

Although some domestic leading lithium salt enterprises have been "hoarding" at low prices at the end of last year, with the gradual consumption of inventory in the second half of the year, the supply of lithium concentrate will be increasingly tight, and the second half of the year may be the most tense period of lithium concentrate supply.

"We don't see any factors to suppress lithium price"

Western Australia is the main supplier of lithium resources in the world.

According to Feng Ying, a lithium industry analyst at Baichuan Yingfu, on the supply side, lithium concentrate supply in Western Australia accounts for 46%, while Salt Lake supply in South America accounts for 31%.

Equivalent to, nearly half of the world's supply depends on Western Australia's lithium concentrate, which is the main contradiction in the current supply of lithium resources.

A group of data given by Feng Ying shows that since 2018, the local lithium concentrate inventory first increased and then decreased, and the inventory peak appeared around January 2020, more than 50000 tons of lithium carbonate equivalent.

Subsequently, with the improvement of China's demand, the inventory data continued to drop to about 30000 tons of lithium carbonate equivalent by May this year. In view of the high domestic demand in June, the above inventory level will fall further accordingly.

Under the above background, the price of lithium concentrate began to rise continuously.

By the end of December 2020, the price of imported lithium concentrate was 420 US dollars / ton. By the beginning of July this year, the average price of lithium concentrate had risen to 735 US dollars / ton, returning to the high level of more than 700 US dollars.

The driving forces include the high domestic demand for new energy vehicles, the concentrated release of power battery material capacity in the second half of the year, and the lack of short-term incremental supply side and many other factors.

However, the core is the supply side.

The largest supplier of Western Australia is the green bush mine under talison. At present, the capacity of lithium concentrate is about 1.34 million tons / year, and the planned production capacity is 1.94 million tons / year. MT Marion ranks second, with a capacity of 450000 tons / year.

Other major suppliers include Pilbara minerals (330kt / a), Altura (220000 T / a) and MT Catlin spodumene (180000 T / a).

The above-mentioned resources have already been allocated by means of equity, underwriting agreement and so on.

Talison lithium concentrate is mainly supplied to Tianqi lithium Co., Ltd. and American Yabao, and is not sold to the outside world. The lithium concentrate produced by MT Marion is underwritten by Ganfeng Lithium Industry Co., Ltd., while MT Catlin spodumene ore has signed a supply agreement with Yahua group and Shengxin lithium energy Co., Ltd., stipulating that 120000 tons and 60000 tons of lithium concentrate will be sold to them each year.

As for the remaining Altura company, due to the low lithium price bankruptcy in 2019, after restructuring, the capacity was announced to restart in June this year, but the restart time point is the end of 2021, and the large-scale capacity release may be postponed to the middle of 2022.

In the short term, at least in the second half of the year, the increment of lithium concentrate in Western Australia will not be expected.

CITIC Securities also pointed out in the Research Report on the price increase of lithium carbonate that "the growth of lithium supply in this year and next year mainly comes from the lithium extraction capacity of salt lakes in South America, including the expansion projects of Yabao company, sqm and Ganfeng lithium industry. However, the above capacity can not be effectively supplied until the second half of 2022. It is expected that the shortage of lithium supply will not be relieved for a long time, At present, there is no factor to suppress the lithium price. "

"Tianqi and Yabao are not short of minerals, so the focus of the market is whether talison's mine will find other enterprises to produce on behalf of others." Feng Ying said.

This possibility exists, but lithium enterprises have just emerged from the downturn in 2019. If OEM is adopted, the contradiction between supply and demand in the lithium salt market will be alleviated to a certain extent, which is not conducive to the improvement of the price of lithium carbonate and other products and the enterprise's profitability. Will the giants choose this way?

Head enterprises have stock, lithium concentrate auction price set a new high

Under the background that the inventory of lithium concentrate in Western Australia is gradually declining and the production capacity cannot be released in the short term, the supply of lithium concentrate in the second half of the year will only become increasingly tight.

At the beginning of July this year, the column of "hard core investment and research" of our newspaper pointed out that the current market is in the stage of "ore grabbing". At present, domestic inventory is mainly concentrated in the top lithium salt production enterprises which have arranged upstream in advance, and some enterprises that have concentrated on stock preparation by the end of 2020.

Even Ganfeng lithium, which owns the underwriting rights of Mount Marion, Australia's second largest mine, has not stopped buying lithium this year.

Although it is difficult to determine the actual inventory of raw materials of each enterprise, it can be seen from the interview that the current industry is facing the problem of lack of increment in the raw material end. Due to the early start-up time of the leading enterprises, the supply of raw materials should be relatively sufficient.

Leaving aside Tianqi lithium industry, which is the least worried about the supply of lithium concentrate, other lithium mining stocks whose stock prices have been in a leading position in recent years are more like this.

On July 27, a person from Yahua group said, "the company will have a certain amount of stock by the end of 2020. This year, the supply of raw materials will be guaranteed and the production capacity can not be idled. The company has made corresponding plans and preparations."

Prior to that, Yahua group has obtained the underwriting right of 120000 tons of the above MT Catlin spodumene ore. according to the agreement, the excess part can be coordinated to increase supply, and Yahua shares have the preemptive right.

Regarding the supply of Australian core company, which Yahua group shares, the above-mentioned people responded that "the agreement has not been formally signed". In addition, according to the reply to the investor relations platform of the company, as of the middle of June this year, the lithium mine of core company, which is expected to produce 170000 tons per year, has not yet entered the mining stage.

When replying to the reporter's question of raw material supply recently, Ganfeng lithium said, "in addition to MT Marion and the underwriting agreement signed, it has locked in the raw material supply of more than 600000 tons, and the company's capacity planning has matching raw material supply."

In contrast, Jiangxi Nanshi lithium industry, an unlisted company, reported on July 27 that the company has certain lithium mica mineral resources, and its raw material supply is not a problem, "but Jiangxi's overall production capacity is large, raw materials can not meet all enterprises, among which the leading enterprises should be relatively stable."

According to a person in the industry who did not want to be named, only in terms of raw material inventory, lithium salt enterprises such as Tianyi lithium industry, Ganfeng lithium industry and Yahua group, and Jiangxi mica lithium extraction enterprises such as jiangte Electric Machinery Co., Ltd. are more abundant in raw materials.

However, considering the important position of the above lithium concentrate in the global lithium resource supply, it is only in the stage of digestion and inventory. Once the inventory consumption reaches the critical point, the market supply pressure will increase rapidly.

"Taking into account the contribution of South American salt lakes and China's spodumene, salt lake, lepidolite and waste recovery contribution, it is expected that it will also be difficult to make up for the gap in lithium concentrate, and the current market is optimistic about the demand side." Feng Ying said.

Under the above background, the price of lithium concentrate has recently reached a record high.

According to Guotai Junan, Pilbara, one of Australia's major miners, auctioned lithium concentrate on BMX electronic platform on July 29. More than 30 enterprises participated in the auction. The final price of lithium concentrate was 1250 US dollars / ton, and the domestic price was 1315 US dollars / ton, which was a record high.

Mapped to the A-share market, lithium stocks with mineral end assets have strengthened significantly recently.

From July 20 to 29, Rongjie shares (35.83%), Tianqi lithium industry (31.91%) and jiangte Electric Co., Ltd. (25.43%) ranked the top of the 12 lithium stocks. From the resource side, these companies also corresponded to domestic lithium, Australian lithium and Jiangxi lithium mica.

Although there is still room for further prosperity in the industry in the second half of the year, the considerable increase accumulated by lithium mining stocks in the secondary market needs to be alerted. For example, the annual growth rate of some stocks has approached 400%.

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