Original title: Lithium carbonate takes off in 2021, year-end price hits a record high. Source: Business Club
1. A review of the price trend of lithium carbonate in the past 4 years from 2018 to 2021
From 2018 to 2021, lithium carbonate rebounded strongly after 3 years of silence, and then the price can be described as a gratifying increase. It can be seen from the four-year price graph that the price of lithium carbonate continued to rise in 2021, and after exceeding the highest point in 2018, it continued to rise strongly. At the end of 2021, the lithium carbonate index rose to more than 670 points.
According to the Lithium Carbonate Index chart of the business community in the past four years, it can be seen that from 2018 onwards, lithium carbonate has been affected by excess production and weak downstream market demand, which has caused the price to continue to decline. Coupled with the adjustment of the state’s policy on the amount of subsidies for energy batteries and the impact of imported low-priced lithium carbonate into the domestic market, the price of lithium carbonate can be described as falling again and again. The index price continued to hit new lows. Until mid-September 2020, lithium carbonate also ushered in the lowest point in the past four years. At that time, the average price of industrial-grade lithium carbonate was 38,900 yuan/ton, and the average price of battery-grade lithium carbonate was 43,900. Yuan/ton, the price index has fallen from 405 points to 99 points, a drop of 306 points. Then in November of the same year, it began to pick up, stop falling and rebound, and this upward trend continued until the end of 2021. As of December 31, 2021, the lithium carbonate index rose from 100 points to 677 points, an increase of 577 points.
2. Analysis of the price trend of lithium carbonate in 2021
According to the data monitoring of the business agency: in 2021, the price of lithium carbonate products will rise fiercely, and the price will be in the upward range for the whole year, and the price will skyrocket towards the end of the year. On December 31, the average price of industrial-grade lithium carbonate in East China was 266,000 yuan/ton, a 432% increase compared with the beginning of the year (the average price of industrial-grade lithium carbonate in East China was 50,000 yuan/ton on January 1). On December 31, the average price of battery-grade lithium carbonate in East China was 282,000 yuan/ton, an increase of 416.48% compared with the beginning of the year (the average price of battery-grade lithium carbonate in East China was 54600 yuan/ton on January 1). In 2021, the price of lithium carbonate has seen three rounds of relatively large climbs, and the price continues to hit historical highs.
The first round of rising range (1.1-4.1): industrial grade lithium carbonate rose by 74%, battery grade lithium carbonate rose by 65.93%
Entering 2021, the price of lithium carbonate continued to increase at the end of 2020. In January, manufacturers in some regions gradually entered the maintenance phase. The output declined significantly, the supply of market circulation decreased sharply, the demand of downstream manufacturers showed explosive growth, and the market ushered in an imbalance of supply and demand. , The overall negotiated price level has risen sharply. In February, the market ushered in the Spring Festival holiday, so stocking sentiment was high, and prices continued to rise. Before the holiday, some major lithium salt factories had ceased production, coupled with more logistics shutdowns, resulting in a substantial increase in transportation costs and driving overall prices upward. After the holiday, sales of lithium carbonate began to recover, and some downstream enterprises immediately started production. The market demand increased, and the price of lithium carbonate continued to rise.
In March, the resumption of production and work in various industries began to improve, industry production was also on the right track, and market procurement began to gradually rise and concentrate. Supported by the strong demand in the downstream lithium iron phosphate market, the overall demand side performance continues to be strong. Downstream manufacturers often lock in demand for orders. Under the situation that large lithium carbonate manufacturers have no excess external sales, suppliers are willing to price, and market discussions continue to focus on Go higher.
April-June prices stabilized, slightly under pressure
After the first round of large increases, the price of lithium carbonate entered a period of flattening. The price increase trend of lithium carbonate slowed down from April to June, mainly due to the strong purchasing power of downstream manufacturers in the early stage. At this stage, most of the inventory held is consumed. However, the domestic lithium carbonate continued to increase from March to May, and the market situation of short supply has been significantly improved. In addition, downstream manufacturers intend to lower prices. The market transaction situation is relatively ordinary, and the price is slightly loosened, but most manufacturers offer more. Stable, the actual market transaction is stable but weak. Affected by the Indian epidemic in June, domestic metal lithium export orders have been reduced, which has greatly affected China’s export volume of 3C products, which has led to a weakening of battery demand, which has slightly weakened the demand for lithium carbonate from the raw material side, causing the price of lithium carbonate to continue to be under pressure.
The second round of rising range (7.1-9.30): industrial grade lithium carbonate rose 93.76%, battery grade lithium carbonate rose 93.81%
In July, the price of lithium carbonate returned to the upward trend again after a period of flattening. In terms of demand, lithium iron phosphate companies launched new production lines, superimposed on the increase in downstream demand, and overall demand for lithium carbonate increased. In addition, many smelting companies have transferred their inventory to traders, and manufacturers have begun to increase prices in late July. In August, the price of lithium carbonate rose even more rapidly. The new capacity of the domestic lithium iron phosphate market was rapidly released, and the market was in short supply. The reluctance of smelting enterprises to sell increased, the quotation jumped significantly, and the transaction price continued to rise.
In mid-September, domestic mainstream manufacturers basically completed their spot sales this month, and the market supply is very tight. There continues to be a gap in the upstream raw materials, the overseas mines and salt lakes have not yet begun to increase the amount of raw materials, and the tight state of raw materials has continued. It was not until the end of September that the increase in the price of lithium carbonate slowed down. First, due to the continued high price, small and medium-sized material factories had lower acceptance, most of which were based on inquiries, but the purchase volume was slightly inferior. Second, the demand side is affected by the “dual energy consumption control” policy and the increase in imports, which has slightly weakened the market’s reluctance to sell, and traders and some smelters have begun to gradually increase their sales to the market.
The third round of rising range (10.1-12.31): industrial grade lithium carbonate rose by 58.52%, battery grade lithium carbonate rose by 60.96%
In October, the lithium carbonate market was more affected by the “dual control of energy consumption” policy, and downstream companies were significantly reducing production. Therefore, the relative decline in demand caused the price of lithium carbonate to rise slowly. Coupled with the replenishment of overseas imports, the market lack of stock sentiment eased slightly. All companies are in a state of tentative quotations, the market has strong wait-and-see sentiment and relatively few transactions. The market pricing is in a state of gaming, and this state of gradual upward movement lasted until the end of November.
Subsequently, the price of lithium carbonate continued to accelerate until the end of the year. From the perspective of supply, after November, lithium carbonate smelters in Jiangxi, Sichuan, Qinghai and other places will enter the Spring Festival maintenance period, resulting in a decline in the market’s lithium carbonate production. In addition, the production of lithium mines in domestic salt lakes and other places will decrease in winter. The gap in market supply continues to widen. There was also obvious panic in the downstream stocking at the end of the year. The downstream orders of lithium iron phosphate manufacturers maintained a tight supply situation, and the new production line was in a ramp-up stage; the output of ternary materials still increased slightly, and there was a small increase in demand at the power end; In addition, the new production capacity of lithium hexafluorophosphate, a raw material for electrolyte, has increased the demand for lithium carbonate.
3. Lithium carbonate production capacity, policy impact and market supply and demand in 2021
Production capacity, policy influence
In 2021, China’s supply of lithium carbonate was approximately 229,000 tons, a year-on-year increase of 35%. The domestic lithium carbonate production capacity is approximately 415,500 tons/year, an increase of 19% year-on-year. At the 75th United Nations General Assembly in September 2020, my country proposed the goal of peaking carbon by 2030 and carbon neutral by 2060. In the context of carbon peak and carbon neutrality, my country’s new energy vehicles are ushering in development opportunities. Lithium carbonate is an important raw material for new energy vehicle power batteries. At present, lithium carbonate is mainly used to produce lithium iron phosphate and low- and medium-nickel cathode materials in ternary materials. Therefore, the market demand for lithium carbonate will be greatly increased in 2021.
Upstream lithium resources are scarce and prices rise
According to the classification of production raw materials, 49% of China’s lithium carbonate production is produced with spodumene as raw material, 25% is produced with lepidolite as raw material, and 26% is produced with salt lake brine as raw material. This shows that the demand for spodumene is occupied It’s more than half of the time. Although China’s lithium resources are rich and have great potential, the domestic lithium industry is faced with the difficulty of hard rock lithium mining and is heavily dependent on external resources.
In 2021, the demand for imported spodumene concentrate in the upstream of the lithium carbonate market will intensify, and the price of lithium ore will hit a new high. The price of spodumene concentrate in the first half of the year has risen to US$700-730/ton. Subsequently, at the end of July in the second half of the year, an auction was held on the BMX platform of Pilbara, an Australian lithium mining company. The final auction price of 10,000 tons of spodumene concentrate was US$1,250/ton. Pilbara’s second batch of lithium was sold on September 14. The auction price of 8000 tons of pyroxene concentrate reached US$2240/ton. The third auction of spodumene concentrate was held on October 26. The final auction price was set at US$2350/ton, and the price continued to set new historical highs. In winter, the energy consumption costs of salt lake lithium extraction manufacturers have also risen. On the whole, the cost of lithium salt smelting has gradually increased, which has supported the maintenance of lithium carbonate prices to a certain extent.
Downstream industry demand surges
The rapid development of the downstream new energy automobile industry has made the lithium resource sector favored by the market, and the demand side continues to increase. In the first half of the year, the cathode material plant basically maintained its high level of operation. The lower production cost of lithium iron phosphate batteries has gradually become popular, increasing market demand, coupled with the continuous growth of the new energy market, and manufacturers’ purchasing intentions have continued to increase, although ternary materials are to a certain extent Under the impact of lithium iron phosphate, the demand for raw materials has not changed significantly.
In the second half of the year, the expansion of the industrialization of lithium iron phosphate gradually deepened, and the company’s production capacity began to increase rapidly. According to data from the business agency, the overall price of lithium iron phosphate in 2021 will increase by 183.78%, an increase of 68,000 yuan/ton. The production capacity of lithium iron phosphate in 2020 will be 320,000 tons. As of December 2021, the estimated production capacity of lithium iron phosphate will reach 920,000 tons. , Production capacity is also showing double growth. The other 3C demand has picked up due to the slight recovery of chip supply, and factors such as the gradual release of new production capacity of mainstream lithium hexafluorophosphate companies have played a positive role in supporting the soaring price of lithium carbonate throughout the year.
Fourth, lithium carbonate market outlook forecast
Lithium carbonate analysts of the Business Society believe that: the price of lithium carbonate is still rising rapidly at the end of the year, the demand for upstream capital withdrawal is high, the stocking sentiment in the downstream market continues to increase, the supply of lithium carbonate is basically at a low level, and the imbalance between market supply and demand continues to expand. As the Spring Festival holiday approaches, logistics will be suspended around mid-January. Therefore, there may be a centralized procurement of lithium carbonate in early January, logistics and transportation costs may also increase, and the price of lithium carbonate will continue to rise. trend. After the Spring Festival holiday, the market operating rate resumed, and demand will continue to rise again. Under the anticipation of the rapid expansion of the global lithium battery industry, the global and China lithium carbonate gap may be further enlarged. It is expected that the price of lithium carbonate may continue to rise in the first quarter of 2022.
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