Prominent contradiction between lithium supply and demand
Since the second half of 2020, the global hot sales of new energy vehicles have driven the surge in lithium demand, and the fundamental situation of the lithium industry has been reversed. Due to the downturn of lithium price, mines have reduced production and stopped production, and there is no new production capacity; Although the production cost of salt lake is low and the low lithium price does not hinder the new construction / expansion plan of Salt Lake, the epidemic has forced the interruption of labor-intensive production capacity construction of Salt Lake and delayed the launch of new production capacity. At present, the contradiction between lithium supply and demand is very prominent. On the one hand, the booming global sales of new energy vehicles since the second half of 2020 has driven the surge in lithium demand; on the other hand, the increase in lithium supply in recent years is extremely limited. Looking forward to the future, this report focuses on the analysis of the lithium demand increment and lithium supply increment in 2022, and explores the marginal changes in the supply and demand of the lithium industry in 2022.
Lithium demand: from “industrial monosodium glutamate” to “white oil” is a subversive change
In the early years, lithium was known as “industrial monosodium glutamate”, reflecting that lithium was widely used, but its dosage was scarce. Today, lithium is also known as “white oil”, which reflects that lithium plays an important role in the energy field, which is in great demand and indispensable. According to sqm annual report, the global demand for lithium in 2020 is 330000 tons of lithium carbonate equivalent, of which power batteries account for 54%, and the increase of lithium demand in the future mainly comes from power batteries. We expect that the global sales volume of new energy vehicles will be 9.4 million (+ 38%) in 2022, corresponding to the demand increment of lithium power battery in 2022, which is about 144000 tons of lithium carbonate equivalent. If we consider the expansion of the industrial chain, the actual demand increment will be greater.
Lithium supply: the increase of lithium supply cannot keep up with the increase of lithium demand
This report combs the production scheduling of major salt lakes and spodumene mines in production and about to be put into operation in the world. It can be seen that sqm, ALB and Pilbara will be the main forces of lithium supply increment in 2022, with strong certainty. Among them, sqm contributes 40000 tons of lithium carbonate equivalent, ALB contributes 26000 tons of lithium carbonate equivalent, and we expect that Pilbara will have 16000 tons of lithium carbonate equivalent. In addition, there are some sporadic lithium supply increments that cannot be described. The larger one is Lanke lithium industry in Chaerhan Salt Lake, Qinghai, China. We expect that the lithium supply increment of Lanke lithium industry will be 10 Yihua Healthcare Co.Ltd(000150) 00 tons of lithium carbonate equivalent in 2022.
Investment advice
In 2022, the increase of lithium supply can not keep up with the increase of lithium demand, and the contradiction between supply and demand is difficult to ease. It is expected that the shortage of lithium supply will run through the whole year, and the lithium price will remain high. Benefiting from the high price of lithium, the performance flexibility of Listed Companies in the lithium industry is very large, and some second tier companies seize the opportunity to grow and realize transformation. Although the sector increased significantly in the early stage, we believe that the market has insufficient understanding of the performance flexibility of Listed Companies in the lithium industry and the persistence of high lithium prices, and there are still investment opportunities in the lithium industry. It is suggested to pay attention to the companies with guaranteed lithium resources and real capacity investment and output growth in 2022. Give the lithium industry an “overweight” rating.
Risk tips
Lithium price fluctuation risk. The rising price of lithium ore squeezed the profits of lithium salt enterprises.
The construction period of salt lakes and lithium mines is long, the ramp up period of production capacity is long, and there is uncertainty when they are put into operation and reach production.
