Industry perspective
Tight balance between supply and demand in 22 years: 532100 tons of supply, 558900 tons of demand and 26800 tons of gap.
January March: the largest gap between supply and demand. Affected by the Spring Festival, maintenance, climate and other factors, the supply decreased by 12% month on month in February, and the demand decreased by only 3.2% month on month. The gap between supply and demand widened, and the lithium salt factory went to the warehouse. In March, enterprises began to resume work and production, with supply increasing by 26% month on month and demand increasing by 9.8% month on month.
April May: the epidemic exceeded expectations and affected demand. In April, the output of China’s salt lakes and Sichuan mines increased, and the output of China’s Mica increased in May. Affected by the epidemic, the demand is expected to decline by 1% in April and 2% in lithium salt import in May. From April to may, the supply was slightly surplus and the demand lagged behind.
June September: the gap between supply and demand narrowed. In June, lithium salt imports continued to decline, with supply falling by 1%. In July, China’s Mica production increased and Australian mining projects were put into operation, narrowing the gap, and lithium salt imports rebounded in August.
October December: the gap between supply and demand intensifies. The output of China’s Salt Lake Sichuan mine decreased in winter, the output of lithium salt corresponding to Australia mine increased, the import of lithium salt from overseas salt lakes increased, the demand entered the traditional peak season, and the gap intensified.
Supply side: China’s lithium salt supply = China’s lithium salt output (Sichuan mine + mica + Salt Lake + recovery) + China’s lithium salt output (imported concentrate) + China’s lithium salt import (overseas Salt Lake) – China’s lithium salt export
China’s lithium salt output (Sichuan mine + mica + Salt Lake + recovery) is 236000 tons: the annual output of Sichuan mine is 25000 tons, Q3 Q2 Q4 Q1; The annual output of mica is 87000 tons, Q4 Q3 Q2 Q1; The annual output of salt lake is 84000 tons, Q2 = Q3 Q4 Q1; The annual output of battery recycling is 40000 tons. China’s lithium salt output (imported concentrate) is 263200 tons: Australia’s annual output is 319000 tons, accounting for about 80% of exports to China, Q4 Q3 Q2 Q1; The annual output of other overseas concentrates is 12000 tons.
China’s lithium salt import (overseas salt lakes) is 121100 tons: Chile’s annual output is 200000 tons, Q4 Q3 Q2 Q1; Argentina’s annual output is 52500 tons, Q4 Q3 Q1 Q2, and the proportion of exports to China is 40% – 55%; China exported 88000 tons of lithium salt.
Demand side: China’s lithium salt demand = China’s lithium consumption of cathode materials + China’s lithium hexafluorophosphate + China’s lithium consumption in traditional industrial fields
China’s lithium consumption of cathode materials is 466100 tons: 228500 tons of Sanyuan, 186300 tons of lithium iron phosphate, 37900 tons of lithium cobaltate and 13300 tons of lithium manganate; China’s lithium hexafluorophosphate consumption is 31700 tons; The amount of lithium used in traditional fields is 61100 tons.
The demand for lithium salt fluctuated greatly from January to February due to the impact of the Spring Festival and goods preparation. The demand picked up in March. From April to may, it may be affected by the epidemic in China. The fourth quarter entered the peak demand season, mainly tracking the production scheduling rhythm of the industrial chain. In the past 22 years, the overall demand showed a trend of low in the front and high in the back, Q4 Q3 Q2 Q1.
Investment suggestion & investment object
Combined with the monthly supply and demand split, the deterministic supply and demand of lithium industry was tight in 22 years. Continue to focus on the idea of “performance + growth”, and still focus on companies with resources, processing capacity and growth in the future, such as leading Tianqi Lithium Corporation(002466) , Ganfeng lithium, flexible targets Yongxing Special Materials Technology Co.Ltd(002756) , Chengxin Lithium Group Co.Ltd(002240) , Keda Industrial Group Co.Ltd(600499) , etc.
Risk tips
The uncertainty of lithium salt price trend in the later stage increases, and the downstream demand is lower than expected.
