Overseas lithium hydroxide prices callback, the evaluation price of lithium concentrate remains unchanged, and the recovery momentum is gradually showing
Overseas lithium hydroxide increased slightly, showing a warming trend. According to SMM data, as of Friday (May 20), the quotation of battery grade lithium carbonate was 461500 yuan / ton, unchanged month on month; The quotation of industrial grade lithium carbonate was 425500 yuan / ton, with a month on month decrease of 1000 yuan / ton; The quotation of battery grade lithium hydroxide is 467500 yuan / ton, unchanged month on month; The quotation of industrial grade lithium hydroxide is 452500 yuan / ton, unchanged month on month. Industrial carbon prices fell slightly this week, mainly due to the impact of the Chinese epidemic, leading to the head cathode manufacturers have not yet conducted bulk procurement and weak demand. On May 19, fastmarkets’ evaluation price of lithium hydroxide in East Asia was US $80.75/kg, an increase of US $0.25/kg, equivalent to about 545100 yuan / ton. According to fastmarkets’ judgment, this increase is mainly due to the continuous shortage of spot supply under the condition of strong demand; Lithium carbonate is quoted at US $74.5/kg, down US $0.5/kg, equivalent to about 502900 yuan / ton, which is still higher than that in the Chinese market. We expect that in the second half of the year, with the gradual improvement of the epidemic situation in various places, the cathode manufacturers will gradually return to work and production, the demand will pick up, and it is difficult for lithium salt prices to make a significant correction.
On May 19, the evaluation price of fastmarkets lithium concentrate was US $5250 / ton, which remained unchanged month on month; Subsequently, on May 20, Platts energy consulting assessed that the price of lithium concentrate (SC6) was US $6200 / ton (FOB, Australia), which remained unchanged month on month. According to the PLS announcement, the company will hold the fifth lithium concentrate auction on May 24. The lithium concentrate auction in Pilbara has always been the wind vane of the global lithium concentrate price trend and the guide light of the follow-up lithium concentrate long-term association price. Based on the fact that the output of Australian lithium concentrate suppliers in 2022q1 is generally lower than the guideline or at the lower limit of the guideline, we believe that the supply of lithium concentrate is tight and uncertain, and the probability of the transaction price of PLS’s fifth auction continues to rise. Therefore, the long-term agreement price of 2022q3 Australian lithium concentrate may continue to rise under the guidance of overseas benchmark quotation and pls’s auction transaction price in the second quarter, so we expect the evaluation price of lithium concentrate to rise in the future.
Snowway mining auction drop hammer, lithium resource value to be revalued.
The bankruptcy liquidation equity auction of 542857% equity of Yajiang snowway Mining Development Co., Ltd. fell on May 21. The transaction price of the subject matter reached 2.002 billion yuan, and 100% equity was evaluated at 3.684 billion yuan. In addition, according to the announcement of the manager of snowway mining on the fourth public recruitment of intended investors, as of December 13, 2021, the total debt confirmed + deferred was 1.612 billion yuan. In 2016, the price of “increased exploration minerals” of delanongba lithium and quartzite exploration rights was unpaid, and the evaluation result has become invalid. The supplementary payment price is expected to be higher after reassessment. Based on the supplementary payment price in 2016 alone, the total consideration for the debt cleared by delanongba lithium mine is 6.575 billion yuan, including 293200 tons of lithium oxide, 733000 tons of lithium carbonate, and the cost per ton is converted into 9000 yuan / ton LCE. Moreover, the exploration right of snowway company has expired on June 30, 2021. Previously, it has handled the reservation of exploration right for three times. At present, it is continuing to handle the fourth reservation of exploration right. Due to the previous reasons of violation of laws and regulations, it is unknown whether the mining right can be renewed. Delanongba lithium mine can be said to be a project with particularly obvious defects. It is believed that the bidder who spent a lot of money to win the equity is very clear about the risks, but is still willing to take risks and pay a high price. It must be aware of the scarcity of local high-quality spodumene mine resources and the importance of ensuring the safety of electric vehicle supply chain. At present, the global competition for key mineral resources is intensifying. Recently, the United States plans to amend the national defense production act to allow funding for mineral projects in Canada, Australia and the United Kingdom, which focus on key minerals for electric vehicles and weapons. This will allow the U.S. government to use the resources of its closest allies to enrich U.S. manufacturing and industrial infrastructure, and increase the country’s advantage in a highly competitive environment. At this time, the layout of China’s lithium resources can ensure the supply chain security of the new energy industry chain in the future. At the same time, the value of enterprises with China’s high-quality lithium resources is expected to be revalued.
Nickel and cobalt prices are in the downward channel this week
This week, the weekly average price of ferronickel (10%) was 1602.5 yuan / nickel point, down 1.08% month on month, mainly due to the light demand for downstream stainless steel due to the impact of the epidemic, which fell in the short term. It is expected that with the improvement of the epidemic and the recovery of demand, the price is expected to return. The weekly average price of battery grade nickel sulfate was 49050 yuan / ton, down 0.81% month on month, mainly due to the sharp decline in the price of Lun nickel, which led to the decline of the cost of raw materials. Therefore, the price of battery grade nickel sulfate gradually moved down with the decrease of cost.
The weekly average price of metal cobalt this week was 517600 yuan / ton, down 3.73% month on month, mainly due to the recent reduction of overseas prices and the reduction of ex factory prices by large manufacturers, resulting in the decline of electrolytic cobalt futures prices. The weekly average price of cobalt sulfate this week was 100700 yuan / ton, down 2.98% month on month; The weekly average price of Co3O4 was 386800 yuan / ton, down 3.04% month on month. The current cobalt recovery price is weak, and the total cobalt recovery price of the fourth salt plant is lower, which is mainly driven by the current low price of cobalt.
This week, the prices of rare earth mainstream commodities showed first rise and then decline
This week, China’s rare earth market as a whole showed a pattern of first promotion and then suppression. At the beginning of the week, the prices of praseodymium, neodymium, dysprosium and terbium products increased significantly due to the social clearance of 16 districts in Shanghai and the gradual resumption of production by industrial enterprises. However, due to the slow follow-up of downstream demand, the prices of mainstream rare earth raw materials corrected near the weekend. According to China Tungsten online, in addition to the recent poor weather and high environmental pressure, which have led to the reduction of the output of rare earth production enterprises, many overseas countries, such as Myanmar, have great geographical risks and the continuous spread of the epidemic, which has reduced the amount of rare earth raw materials imported by China from overseas to a certain extent, led to the reduction of short-term Chinese supply and improved the confidence of Chinese suppliers in firm quotation. In addition, the gradual recovery of China’s port capacity and the gradual increase of the development speed of overseas emerging industries are conducive to the increase of China’s export of rare earth raw materials.
Investment advice
In 2022, the increment of global lithium resources is limited, and the prices of lithium concentrate and lithium salt imported from abroad have risen sharply. Having the control of upstream resources is particularly important in the current and future global industrial chain competition. Especially under the influence of geopolitics, obtaining the control of China’s lithium resources is the safest guarantee, especially the high-quality Chinese spodumene mine resources. We suggest that you pay attention to the [ Youngy Co.Ltd(002192) ], which is being mined in vein 134 of Ganzi Prefecture; [ Sichuan New Energy Power Company Limited(000155) ] about to be put into operation at Lijiagou spodumene mine in Aba Prefecture; [ Jiangxi Special Electric Motor Co.Ltd(002176) ], which is in the process of transferring exploration to mining of Xikeng lithium mica mine; The beneficiaries include [ Tianqi Lithium Corporation(002466) ] that the greenbushes mine has been increasing production in the next five years and can achieve large-scale production through OEM.
Risk tips
1) the development progress of lithium mine in Sichuan is less than expected;
2) the price of lithium salt has fallen sharply;
3) the downstream demand is lower than expected;
4) geopolitical risk.
