Event overview: on April 1, 2022, allkem (formed by the merger of Galaxy resources and ore) updated the sales price and sales guidance of 2022q2. 2022q2 company expects the average sales price of lithium carbonate to be about 35000 US dollars / ton (FOB) and the sales volume to be about 3500 tons; The company estimates that the price of lithium concentrate is about 5000 US dollars / ton (SC6, CIF), and the sales volume is about 50000 tons.
Analysis and judgment: the tight supply of lithium resources continues to promote the rapid rise of global lithium concentrate prices. Allkem also updated the sales price and sales volume of 2022q1 and 2022q2. Among them, the sales price of lithium carbonate was higher than the previous guidelines. The global shortage of lithium resources began to rapidly push up the global price of lithium salt and lithium concentrate. (1) Spodumene: the company expects the average selling price of spodumene concentrate in 2022q1 to be about US $2218 / ton (CIF). Previously, in the fourth quarter report, the company guided the average selling price of lithium concentrate in 2022q1 to be US $2500 / ton. The reason why the average selling price is lower than the guidance is that some lithium concentrates in 2021q4 are delayed to 2022q1. At present, the price of 2022q2 lithium concentrate (SC6%) preliminarily determined by the company is about 5000 US dollars / ton (CIF), up about 100% month on month, and the sales volume is expected to be about 50000 tons. (2) Lithium carbonate: the sales price of lithium carbonate produced by the company's olaroz Salt Lake exceeded the company's previous expectations. The preliminary expected sales price of 2022q1 company is about US $27236 / ton (FOB), 9% higher than the previous guidance price; The average price of lithium carbonate in 2022q2 is expected to be about 35000 US dollars / ton (FOB), up about 28.5% month on month, and the sales volume is about 3500 tons. (3) The sales price of lithium carbonate and spodumene concentrate released by the company is preliminary and indicative. The final price will be provided in the 2022q1 report released on April 14.
The rapid rise in the price of 22q2 lithium concentrate may lead to the rapid rise in the production cost of lithium salt, and the significant rise in the premium of lithium resources. According to Asia metal network, the average CIF price of spodumene (li2o6% min) in China in 2022q1 is US $2716 / ton. If the price of spodumene in 2022q2 rises to more than US $5000 / ton, the month on month increase will be 84.1%. If converted into the cost of lithium carbonate, we expect the production cost of lithium carbonate to rise rapidly to more than 320000 yuan / ton, the profit of lithium smelting will be compressed rapidly, and the profit will accelerate the transfer to the resource side.
The contradiction between supply and demand of lithium resources is difficult to slow down, and accelerating China's resource development is the best policy. With the rapid growth of demand for downstream electric vehicles and energy storage, only increasing supply is the final solution to alleviate the contradiction between lithium supply and demand. Qinghai, Tibet, Sichuan, Jiangxi and other places in China are rich in lithium resources. Only by accelerating the development of China's lithium resources and ensuring China's own lithium resource supply can we ensure the safe development of China's Shanxi Guoxin Energy Corporation Limited(600617) industrial chain. Otherwise, the profits of the industrial chain will be quickly transferred to the upstream and abroad, highlighting the strategic importance of China's local lithium resources.
Investment suggestion: we expect 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) , etc.
Risk tips: the sales volume of electric vehicles is lower than expected, the price of lithium falls sharply, global macroeconomic risks, etc.
