Mismatch between supply and demand, the price of lithium carbonate continues to jump and continue to reach a new high. Recently, the price of battery grade lithium carbonate has risen to 452500 yuan / ton, nearly 10 times higher than that in 2020. At present, the tight supply and demand situation of global lithium minerals is difficult to alleviate in the short term. Due to the slow speed of new production capacity and the political situation of overseas instability, China’s demand continues to rise, and the price of lithium carbonate is expected to remain high in the short term.
In the construction of new capacity, the supply side capacity cannot be released quickly. In 2021, a total of 17 enterprises in China added capacity, and most of the projects are still under construction. After the completion of the production line, it still needs time for commissioning, so the capacity cannot be released quickly. In 2021, the output of lithium carbonate in China was 230000 tons, an increase of 155.5% over the output level in 2017. It is expected that the new capacity will climb by 2023, and the new capacity will reach 218000 tons in 2023. Based on China’s existing lithium carbonate capacity of 462000 tons in 2021, it is expected that China’s annual lithium carbonate capacity will reach 680000 tons and the output will reach 350000 tons in the next 1-2 years.
The market demand is strong, and the tension between supply and demand will continue. In terms of market demand, China’s consumption of lithium carbonate reached 303000 tons in 2021, an increase of about 155% compared with 2017. We predict that the installed capacity of power battery will reach 1200gwh in 2025, and the global demand for lithium carbonate is expected to reach 672000 tons. When China’s demand accounts for 60%, China’s demand is expected to reach 400000 tons, and the tension between supply and demand will continue.
Extracting lithium from salt lakes will be a breakthrough for China to get rid of its dependence on lithium imports. China’s total lithium resources account for about 6% of the world’s total lithium resources, of which salt lake brine lithium resources account for more than 79% of the country’s total lithium resources. However, most of China’s salt lakes have a high magnesium lithium ratio and it is difficult to develop. Therefore, lithium ore extraction still accounts for a large proportion. About 70% of China’s lithium raw materials still need to import spodumene to meet the production demand. The development of lithium extraction technology from salt lakes will drive the transformation of the supply pattern of lithium resources in China. Lithium extraction from brine has obvious cost and resource advantages. The cost of lithium extraction from brine is only 50% of the cost of lithium extraction from ore.
Investment suggestion: we believe that with the rapid development of the global new energy industry, the demand for lithium continues to increase significantly, but the supply of lithium concentrate is seriously insufficient. In the face of serious supply-demand mismatch, the price of lithium carbonate is expected to remain high in the short term. It is suggested to pay attention to leading enterprises such as Tianqi Lithium Corporation(002466) , Ganfeng Lithium Co.Ltd(002460) . While actively expanding production, lithium salt enterprises will enter the upper reaches of the Bureau through self investment, capital increase, acquisition and long-term order locking, so as to lock in raw materials and ensure long-term safe and stable supply. Lithium carbonate extraction methods such as salt lake lithium extraction will focus on development and usher in a period of development opportunities under the condition of rising lithium salt prices. It is recommended to pay attention to Sunresin New Materials Co.Ltd Xi’An(300487) , Qinghai Salt Lake Industry Co.Ltd(000792) , Tibet Summit Resources Co.Ltd(600338) , Tibet Urban Development And Investment Co.Ltd(600773) , Tibet Mineral Development Co.Ltd(000762) .
