The current price of lithium carbonate broke through 600,000 yuan / ton Some enterprises have paid advance payments for next year to ensure supply

As an important raw material for lithium batteries, the price of lithium carbonate has not yet seen the ceiling

On November 7, the average spot price of domestic battery-grade lithium carbonate in Wuxi Electronic Disk was 615,000 yuan / ton, and the highest price was 617,000 yuan / ton
.
On the same day, the average price of battery-grade lithium carbonate of Shanghai Nonferrous Metal Network was 563,500 yuan / ton, up 2,000 yuan / ton
from the previous trading day.

This price is about 14 times the average price of battery-grade lithium carbonate of 41,000 yuan / ton in June 2020, which is about 55%
higher than the price of 364,000 yuan / ton in early February this year.
In the case of tight supply of battery-grade lithium carbonate and high prices, individual enterprises in the middle and downstream have paid product advances for the whole year of next year in order to ensure production capacity
.

According to Shanghai Nonferrous Metal Network, the current domestic lithium carbonate spot supply still maintains a high gap, so the spot quotations have risen
.
In addition to the delivery of large factory directors' orders, spot transactions are small, and the main market circulation is dominated by small factories and traders, and most of them are small and high-price transactions
.

In the eyes of industry insiders, the main reason for the current rise in domestic lithium carbonate prices is still the imbalance
between supply and demand.
The main customers of lithium carbonate products are downstream battery cathode material manufacturers, battery manufacturers and vehicle enterprises, which are greatly affected by the power battery market
.
On the demand side, the peak season of automakers is mainly concentrated in November and December (the year-end promotional impulse of 4S stores), and the production and sales of new energy vehicles will increase
intensively in the fourth quarter.

On the supply side, it is understood that domestic lithium ore resources are mainly located in Kardze Prefecture and Aba Prefecture, Xinjiang, Jiangxi and other places in Sichuan, and salt lake lithium resources are mainly located in Qinghai and Tibet, of which salt lake resources are greatly affected by seasonal and geographical environments
.
In the fourth quarter, due to the drop in temperature, salt lake production decreased, and lithium salt companies also had some stockpiling, which contributed to the shortage of
the market.

On November 7, the domestic lithium salt production leader Ganfeng Lithium Company received news that the company's lithium salt production is now in full production
.
According to reports, more than 90% of Ganfeng Lithium's current lithium mines come from two mines in Australia: the pilgangoora mine project of Pilbara and the Mount Marion project
of RIM company.
"The company's lithium ore procurement is through the underwriting model, and the lock volume is not locked in price
.
Product prices use a pricing formula that changes
according to market conditions.
In the case of a relatively tight supply of lithium ore, procurement costs have also risen
.
An insider of Ganfeng Lithium said
.

It is understood that at present, Ganfeng Lithium owns 5.
8% of the shares of the pilgangoora project and 50% of the shares
of RIM.
According to the annual report data, the lithium concentrate production of the pilgangoora project in fiscal year 2022 is 377,900 tons; Mt Marion's existing lithium concentrate capacity is 450,000-480,000 tons/year
.
According to the agreement, Ganfeng Lithium underwrote 160,000 tons/year of lithium concentrate at the pilgangoora project and underwrote 49%
of the total lithium concentrate production of Mount Marion.

In terms of lithium carbonate production capacity, Ganfeng Lithium currently has an effective production capacity of 5,000 tons of high-purity lithium carbonate per year in Xinyu, Jiangxi, 20,000 tons of lithium carbonate per year in Ningdu, Jiangxi, and 6,000 tons of lithium carbonate per year
in Cangzhou, Hebei.
In addition, the company's Cauchari-Olazoz lithium salt lake in Argentina with an annual capacity of 40,000 tons of lithium carbonate project is under construction, and it is expected to gradually release production capacity
from the end of 2022 to the first half of 2023.

In the sales of lithium salt, Ganfeng Lithium currently does not sign long-term contracts, sales contracts are signed at any time, and the price follows the market
.

Tianqi Lithium, another domestic lithium salt and lithium mining giant, recently said on the investor interactive platform that the company's lithium salt products are basically full production and full sales, and the specific sales price is determined by combining the commercial needs of different customers, and the price is mostly signed once a month
.
Foreign customers are mainly long-term orders, and the contract time is generally about 3-5 years
.

In terms of lithium ore supply and price, Tianqi Lithium's lithium ore is basically from the Greenbush spodumene mine in Australia owned by the holding subsidiary Telison, which currently has a lithium concentrate capacity of 1.
34 million tons/year and plans to expand production to 1.
94 million tons/year
by 2024.
"At present, the price of Greenbush chemical-grade lithium concentrate is set every six months, and the pricing refers to the price changes of the three mainstream quotation agencies in the lithium product market in the previous quarter, and then gives a certain discount
to the two shareholders of Tianqi and Yabao according to the purchase volume.
" Tianqi Lithium said
.

In terms of lithium salt production capacity, at present, Tianqi Lithium can provide 44,800 tons/year of lithium chemical product production capacity in the three bases of domestic Shehong, Zhangjiagang and Tongliang, and the completed capacity of the Australian Quinana plant is 24,000 tons/year, plus the expansion projects of the Quinana plant, Anju plant and Copper Liang that are in trial operation or under construction/planning, it is expected that after the project is fully completed and put into operation, the total production capacity of lithium chemical products will exceed 110,000 tons/year
.

It is worth noting that in response to investors' questions, Tianqi Lithium said that in order to ensure the continuity of production, the inventory of inventory (mainly the safety stock of Greenbush lithium concentrate purchased by the company from its holding subsidiary Telison, in products, etc.
) increased
from the beginning of the year.

In addition, it was learned from another domestic lithium mining company, Zanger Mining Company, that although some places in Qinghai Province were affected by the epidemic, the production of Zangge Mining Industrial Park was not greatly affected, the factory was still in operation, and the local government also opened a special green channel to transport lithium salt products out
.
However, in the fourth quarter, the salt lake itself produced less
than in the summer due to climate influences.

The global supply of lithium resources remains tight

Globally, most of the global lithium resource supply comes from salt lakes and hard rock lithium mines, of which mature salt lakes are mainly distributed in the South American lithium triangle and China, and most lithium mines are still concentrated in Western Australia
.

It is understood that in the past three years, several new lithium mines in western Australia have been put into operation, and some existing projects have also announced or executed expansion plans
.
It is expected that from 2022 to 2023, the supply of spodumene in Australia will still be one of the main increments in the supply of global lithium resources, and the projects that have been announced to expand spodumene production capacity or build new capacity plans include Greenbush, Mt Marion, Pilgangoora, Ngungaju, Wodgina, Finniss and so on
.

However, due to factors such as labor shortages and declining mine grades caused by the new crown epidemic, the construction and commissioning of spodumene projects in Australia may face various uncertainties
in the near future.
At the same time, due to the long development cycle of lithium resources, the capacity of other types of lithium resource projects cannot be released
in the short term.
The supply of spodumene concentrate is expected to remain tight
in 2022.

In terms of salt lakes, according to a 2022 report by the United States Geological Survey (USGS), the world's best quality salt lake lithium is distributed in Chile, Argentina and Bolivia, known as the South American lithium triangle, accounting for 56%
of global lithium resource reserves.
From 2021 to 2022, the main supply increment of lithium salt lake brine projects will be in Chile, Argentina and China
.

South American salt lake due to its low magnesium-lithium ratio and superior development conditions, at present South American salt lakes can form stable lithium salt production mainly Atacama salt lake, Olaroz salt lake and Hombre Muerto salt lake, and Cauchari-Olaroz salt lake, Sal de Vida salt lake, Mariana salt lake, SDLA and other projects are under construction
.
It is expected that the growth rate of salt lake lithium resource supply after 2023 will increase significantly, but the effective supply is still limited
in the short term.

In terms of lithium mica, China has the world's largest proven reserves of lithium mica ore, compared with spodumene lithium extraction, lithium mica lithium extraction has certain advantages
in resource self-sufficiency and transportation costs.
Previously, due to the complex composition of lithium mica, the large number of impurities in the extraction process, and the difficulty of continuous production, mica lithium extraction was not optimistic for a long time in the past
.

In recent years, domestic lithium mica lithium extraction technology has continued to make breakthroughs, production capacity is gradually released, superimposed on its own resource advantages, lithium mica lithium extraction capacity has been continuously improved in recent years, but the construction of lithium mica lithium extraction capacity also faces challenges from low grade of lithium ore, large amount of waste residue formed by smelting, and other rare and valuable resources contained in lithium ore are difficult to comprehensively utilize
.
According to the forecast of Essence Securities, it is expected that the global lithium mica lithium extraction capacity will reach 85,600 tons of
lithium carbonate equivalent in 2022.

It is worth mentioning that in response to the soaring price of raw materials, Wu Kai, chief scientist of CATL, recently said that it is necessary to accelerate the development and utilization of domestic lithium resources and greatly improve the ability
of upstream mineral resources to ensure supply and stabilize prices.
At the same time, it is necessary to promote the improvement of the battery recycling system, so as to achieve the popularization of electrification and the healthy and orderly development of
the industry.