Summary of lithium mines in Western Australia: the output of 21q4 declined briefly, but the annual production and sales increased significantly, which guided the production and sales of Q1 and the price of lithium concentrate to rise sharply in 2022. 1) Production and marketing of 21q4: technological transformation, labor shortage and epidemic affected production. About 500000 tons of lithium concentrate were produced in 21q4 mines in Western Australia, a decrease of 5% month on month; The total sales of lithium concentrate is about 520000 tons (assuming that the production and sales rate of greenbushes is 100%), with a month on month decrease of about 1%. 2) 2021 production and sales: under the shutdown of Altura, the sales volume of lithium minerals in Western Australia in 2021 still increased significantly year-on-year. In 2021, the mines in production in Western Australia produced about 1.93 million tons of lithium concentrate, with a year-on-year increase of 32%, and the total sales volume was about 1.99 million tons, with a year-on-year increase of about 35%. The growth was mainly due to the improvement of capacity utilization of MT cattlin and pilgangoora, and the improvement of capacity utilization of cgp2 concentrator in greenbushes. 3) Output outlook for 2022: Although the PLS guidance output will be revised down slightly, we expect that under the positive impact of greenbushes climbing to full production, tailings reprocessing plant put into operation, Marion mine 22h2 expansion, ngungaju plant 22h2 resumption of production and wodgina’s 22q2 resumption of production, the amount of lithium refined minerals in western Australia is expected to increase by more than Shanghai Pudong Development Bank Co.Ltd(600000) tons in 2022, It has become one of the main sources of global lithium resource supply increment. 4) Price guidance in 2022: the long-term cooperative price of 22q1 lithium concentrate increased: the long-term cooperative price guidance of MT Catlin was 2500 US dollars / ton CIF (6.0%), the long-term cooperative price guidance of Pilbara was 26 Jinzai Food Group Co.Ltd(003000) US dollars / ton, and the price of greenbushes was 1770 US dollars / ton, which were significantly higher than that of 2021q4. 5) Marginal tightening of circulating lithium resources: we expect that more than 80% of the increment of lithium concentrate in 2022 will be underwritten and locked, the marginal tightening of spot lithium concentrate in 2022, and the supply of raw materials for third-party lithium salt processing plants will become more tight. It is expected that the spot price of lithium concentrate will continue to rise in 2022.
Summary of salt lakes in South America: the volume and price of 21q4 rise together, and the capacity expansion plan will be further raised in the future. They are optimistic about demand but conservative about price guidance. 1) The performance of all companies rose sharply month on month, and the price rise effect of 21q4 began to show, but the growth came more from volume; 2) All enterprises are actively looking forward to the development prospect of new energy vehicles in the future and are optimistic about the lithium price in 2022. Among them, Yabao raised the demand expectation in 2025 to 1.5 million tons of LCE; 3) The company’s guidance on lithium price is still relatively conservative, mainly due to the fact that foreign countries are still dominated by long orders with fixed prices, but the proportion of long orders with fixed prices began to decline significantly, and overseas lithium salt prices began to be gradually linked to China’s spot; 4) All companies announced new long-term expansion plans, among which the long-term planned capacity of Yabao is 45 Tianma Microelectronics Co.Ltd(000050) 0000 tons of LCE, 60000 tons of LCE for living, 210000 tons of LCE for sqm and 5750082500 tons of LCE for olaroz.
Sqm’s performance exceeded market expectations, and the rise in overseas lithium prices in 2022 is expected to trigger the performance. Sqm’s performance was boosted by lithium business and achieved significant growth on a month on month basis, which has become an epitome of the benefits of overseas low-cost lithium resource providers in this round of lithium cycle. We believe that overseas lithium enterprises will fully enjoy the profit release brought by the simultaneous rise of volume and price in the future.
Investment suggestion: it is expected that the tight supply of global lithium resources will continue for a long time in the future. High lithium prices will be the norm of the industry in the future. Resources are king, and independent and controllable resources + continuous growth of production capacity will benefit for a long time. We suggest focusing on Qinghai Salt Lake Industry Co.Ltd(000792) , Yongxing Special Materials Technology Co.Ltd(002756) , Tianqi Lithium Corporation(002466) , Ganfeng Lithium Co.Ltd(002460) , Sinomine Resource Group Co.Ltd(002738) , Tibet Mineral Development Co.Ltd(000762) , Western Mining Co.Ltd(601168) .
Risk tip: the sales volume of electric vehicles is lower than expected; Lithium prices fell sharply; Production expansion plan fails to meet expectations; Global macroeconomic risks, etc.
