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Lithium prices gradually stabilize, supply and demand ease, lithium mining companies seek a "new" way out
2023/7/21
Although the price of lithium carbonate, which continued to decline in the early stage, has rebounded and the sales of lithium salts by manufacturers have gradually improved. However, it is not difficult to see from the performance forecasts of companies such as Jiangte Electric, Rongjie, and Shengxin Lithium Energy in the first half of the year.
A reporter from the Shanghai Securities News learned that although the price of lithium carbonate is unlikely to return to its peak in 2022, judging from the development prospects of new energy vehicles and energy storage, the demand for lithium salt materials will not weaken. "The coordinated development of green transformation and economic growth is constantly showing results." Fu Linghui, spokesperson of the National Bureau of Statistics, introduced at the press conference held by the State Council Information Office on July 17. In the first half of the year, the added value of the lithium-ion battery manufacturing industry above designated size increased by 29.7% year-on-year. The export of "three new" products represented by lithium batteries, solar batteries, and electric passenger vehicles increased by 61.6%.
The demand really exists, so how will the relationship between supply and demand and prices go in the future? What new changes will occur in the industry? The person in charge of a 10,000-ton lithium carbonate production enterprise in Qinghai told reporters that judging from the recent production and sales data, as lithium extraction from salt lakes enters the summer production peak and the previous new production capacity is released successively, the supply of lithium carbonate is tending to ease, and the price in the second half of the year may fluctuate between 250,000 yuan/ton and 300,000 yuan/ton.
Lithium price experience "roller coaster"
Half-year performance of lithium mining enterprises fades away
Looking back on the first half of the year for lithium mining companies, "roller coaster" is the key word in the industry. From the highest point of 600,000 yuan per ton in November 2022 to the lowest point of 180,000 yuan per ton at the end of April this year, the price of lithium carbonate fell by 70% in half a year. Recalling the sharp fluctuations in the price of lithium carbonate, an executive of a lithium salt production company in A shares said that when the price continued to fall, sales were almost at a standstill.
Without sales, there will be no performance. Although the sales of lithium carbonate have gradually picked up since May, and the price that has continued to fall has also rebounded, but in terms of the half-year node, there is not much time left for lithium mining companies to repair their performance. The reporter's rough statistics show that the net profits of the seven A-share lithium mining manufacturers that recently disclosed their performance forecasts for the first half of the year all showed a year-on-year decline, and only two achieved growth month-on-month.
Taking Yahua Group, a large lithium salt company in Sichuan, as an example, the company expects to make a profit of 850 million to 1.05 billion yuan in the first half of the year, a year-on-year decrease of 53.59% to 62.43%. Looking further, the company achieved a net profit of 593 million yuan in the first quarter. It is not difficult to infer from this that the company's net profit in the second quarter was between 257 million yuan and 457 million yuan, a decrease of 23% to 57% from the previous quarter. Regarding the decline in performance, Yahua Group bluntly stated that the price of lithium salts has dropped sharply, resulting in an overall decline in operating performance compared with the same period last year.
Also affected by the decline in lithium prices is Shengxin Lithium Energy. The company expects to achieve a net profit of 600 million to 700 million yuan in the first half of the year, a year-on-year decrease of 76.81% to 80.13%.
If it is said that Yahua Group and Shengxin Lithium Energy just "earned less money", some companies directly lost money. Taking Jiangte Motor as an example, the company expects a loss of 40 million to 60 million yuan in the first half of the year. The reason is that the loss of Jiangte Motor may lie in its limited self-sufficiency resources. For the performance loss, the company stated that the main reason is the loss of lithium salt business caused by the digestion of lithium resources purchased at a higher price in the early stage.
Different from the loss caused by Jiangte Motor's "high price of lithium", large companies such as Salt Lake Co., Ltd. and Rongjie Co., Ltd., which have mines in their hands, although their performance in the first half of the year fell year-on-year, but with the sales recovery in the second quarter, there is still a good quarter-on-quarter growth.
Take Salt Lake Co., Ltd., the leading lithium extractor in Salt Lake, as an example. The company expects to make a profit of 4.7 billion to 5.1 billion yuan in the first half of the year, a year-on-year decrease of 44.31% to 48.68%. The company's profit in the first quarter was 2.225 billion yuan, and it can be inferred that its profit in the second quarter was between 2.475 billion yuan and 2.875 billion yuan, an increase from the previous quarter.
The operating data reflected that lithium carbonate showed a recovery trend in the second quarter. Salt Lake shares previously disclosed that the company sold 1,400 tons of lithium carbonate in the first quarter. According to the latest disclosed data, Salt Lake sold a total of 15,000 tons of lithium carbonate in the first half of the year.
The relationship between supply and demand slows down, lithium mining enterprises seek a "new" way out
After the product price experienced a round of "baptism" from the peak to the foot of the mountain, the lithium salt industry has a new understanding of the development of the industry. Many industry insiders interviewed said that the "roller coaster" of lithium prices has sounded the alarm for the industry, and more companies still hope to promote the industry to embark on a healthy development path by enriching product structure and extending the industrial chain.
"Competitiveness still depends on technology and management, not just price increases." The person in charge of a salt lake lithium extraction company in Qinghai said that as lithium salt prices return to rationality, upstream companies should pay more attention to technology research and development and strive to improve production efficiency. Both salt lake lithium and ore lithium have room to improve lithium yield and efficiency.
Salt Lake Co., Ltd. is focusing on enriching its product structure. Its subsidiary Lanke Lithium Industry plans to develop products such as lithium hydroxide, lithium chloride, lithium metal, and lithium iron phosphate. In addition, the company intends to develop battery-grade lithium hydroxide, lithium chloride, magnesium-lithium alloy and its deep processing industry through investment, mergers and acquisitions, and the introduction of strategic investors, so as to continuously extend the industrial chain of new energy materials for lithium batteries.
Tibet mining executives said in an interview with reporters that the current goal is to focus on the development of lithium and chromium resources. While stepping up the development of the second phase of the Zabuye Salt Lake project, they hope to further enrich the product structure.
Lithium mining giant Tianqi Lithium has entered the new energy vehicle track. Tianqi Lithium recently announced that its wholly-owned subsidiary joined hands with Geely Holding Group and Mercedes-Benz to participate in SM’s A-round equity financing with US$150 million of its own funds, and subscribed for 17.606 million Class A ordinary shares issued by it.
Ganfeng Lithium also agrees with Tianqi Lithium. Ganfeng Lithium's strategic investment in Dongfeng Lantu completed the industrial and commercial change at the end of January. This is the second order Ganfeng Lithium has placed in a new energy vehicle company after investing in GAC Aian in 2022. At the same time, Ganfeng Lithium will also set its sights on the power battery track. The company announced on the evening of July 20 that its subsidiary, Ganfeng Lithium, intends to invest in the construction of a lithium battery production project in Chilechuan Dairy Development Zone. The project will be constructed in two phases, of which the first phase will build a lithium battery project with an annual output of 10GWh, with a planned investment of no more than 6 billion yuan.
It is worth mentioning that no matter whether it is rising sharply or falling sharply, the sharp fluctuations in the price of lithium carbonate are not good for the development of the industry. With the listing of lithium carbonate futures options, the risk of large fluctuations in lithium carbonate prices is expected to be suppressed.
After planning for a long time, the long-awaited lithium carbonate futures contract will be listed and traded on the Guangzhou Futures Exchange today, and the lithium carbonate option contract will be listed and traded from July 24.
"As an upstream manufacturer, we are very happy to see the listing of lithium carbonate futures, and the price of lithium carbonate is expected to be stabilized." A related person from Zangge Mining told reporters that the company has applied to Guangzhou Futures Exchange for the qualification of a lithium carbonate designated delivery factory warehouse. In the future, it will consider choosing an appropriate time to participate in it based on the company's actual situation, assist the company's production and operation activities, and improve the company's ability to resist risks and profitability.
A reporter from the Shanghai Securities News learned that although the price of lithium carbonate is unlikely to return to its peak in 2022, judging from the development prospects of new energy vehicles and energy storage, the demand for lithium salt materials will not weaken. "The coordinated development of green transformation and economic growth is constantly showing results." Fu Linghui, spokesperson of the National Bureau of Statistics, introduced at the press conference held by the State Council Information Office on July 17. In the first half of the year, the added value of the lithium-ion battery manufacturing industry above designated size increased by 29.7% year-on-year. The export of "three new" products represented by lithium batteries, solar batteries, and electric passenger vehicles increased by 61.6%.
The demand really exists, so how will the relationship between supply and demand and prices go in the future? What new changes will occur in the industry? The person in charge of a 10,000-ton lithium carbonate production enterprise in Qinghai told reporters that judging from the recent production and sales data, as lithium extraction from salt lakes enters the summer production peak and the previous new production capacity is released successively, the supply of lithium carbonate is tending to ease, and the price in the second half of the year may fluctuate between 250,000 yuan/ton and 300,000 yuan/ton.
Lithium price experience "roller coaster"
Half-year performance of lithium mining enterprises fades away
Looking back on the first half of the year for lithium mining companies, "roller coaster" is the key word in the industry. From the highest point of 600,000 yuan per ton in November 2022 to the lowest point of 180,000 yuan per ton at the end of April this year, the price of lithium carbonate fell by 70% in half a year. Recalling the sharp fluctuations in the price of lithium carbonate, an executive of a lithium salt production company in A shares said that when the price continued to fall, sales were almost at a standstill.
Without sales, there will be no performance. Although the sales of lithium carbonate have gradually picked up since May, and the price that has continued to fall has also rebounded, but in terms of the half-year node, there is not much time left for lithium mining companies to repair their performance. The reporter's rough statistics show that the net profits of the seven A-share lithium mining manufacturers that recently disclosed their performance forecasts for the first half of the year all showed a year-on-year decline, and only two achieved growth month-on-month.
Taking Yahua Group, a large lithium salt company in Sichuan, as an example, the company expects to make a profit of 850 million to 1.05 billion yuan in the first half of the year, a year-on-year decrease of 53.59% to 62.43%. Looking further, the company achieved a net profit of 593 million yuan in the first quarter. It is not difficult to infer from this that the company's net profit in the second quarter was between 257 million yuan and 457 million yuan, a decrease of 23% to 57% from the previous quarter. Regarding the decline in performance, Yahua Group bluntly stated that the price of lithium salts has dropped sharply, resulting in an overall decline in operating performance compared with the same period last year.
Also affected by the decline in lithium prices is Shengxin Lithium Energy. The company expects to achieve a net profit of 600 million to 700 million yuan in the first half of the year, a year-on-year decrease of 76.81% to 80.13%.
If it is said that Yahua Group and Shengxin Lithium Energy just "earned less money", some companies directly lost money. Taking Jiangte Motor as an example, the company expects a loss of 40 million to 60 million yuan in the first half of the year. The reason is that the loss of Jiangte Motor may lie in its limited self-sufficiency resources. For the performance loss, the company stated that the main reason is the loss of lithium salt business caused by the digestion of lithium resources purchased at a higher price in the early stage.
Different from the loss caused by Jiangte Motor's "high price of lithium", large companies such as Salt Lake Co., Ltd. and Rongjie Co., Ltd., which have mines in their hands, although their performance in the first half of the year fell year-on-year, but with the sales recovery in the second quarter, there is still a good quarter-on-quarter growth.
Take Salt Lake Co., Ltd., the leading lithium extractor in Salt Lake, as an example. The company expects to make a profit of 4.7 billion to 5.1 billion yuan in the first half of the year, a year-on-year decrease of 44.31% to 48.68%. The company's profit in the first quarter was 2.225 billion yuan, and it can be inferred that its profit in the second quarter was between 2.475 billion yuan and 2.875 billion yuan, an increase from the previous quarter.
The operating data reflected that lithium carbonate showed a recovery trend in the second quarter. Salt Lake shares previously disclosed that the company sold 1,400 tons of lithium carbonate in the first quarter. According to the latest disclosed data, Salt Lake sold a total of 15,000 tons of lithium carbonate in the first half of the year.
The relationship between supply and demand slows down, lithium mining enterprises seek a "new" way out
After the product price experienced a round of "baptism" from the peak to the foot of the mountain, the lithium salt industry has a new understanding of the development of the industry. Many industry insiders interviewed said that the "roller coaster" of lithium prices has sounded the alarm for the industry, and more companies still hope to promote the industry to embark on a healthy development path by enriching product structure and extending the industrial chain.
"Competitiveness still depends on technology and management, not just price increases." The person in charge of a salt lake lithium extraction company in Qinghai said that as lithium salt prices return to rationality, upstream companies should pay more attention to technology research and development and strive to improve production efficiency. Both salt lake lithium and ore lithium have room to improve lithium yield and efficiency.
Salt Lake Co., Ltd. is focusing on enriching its product structure. Its subsidiary Lanke Lithium Industry plans to develop products such as lithium hydroxide, lithium chloride, lithium metal, and lithium iron phosphate. In addition, the company intends to develop battery-grade lithium hydroxide, lithium chloride, magnesium-lithium alloy and its deep processing industry through investment, mergers and acquisitions, and the introduction of strategic investors, so as to continuously extend the industrial chain of new energy materials for lithium batteries.
Tibet mining executives said in an interview with reporters that the current goal is to focus on the development of lithium and chromium resources. While stepping up the development of the second phase of the Zabuye Salt Lake project, they hope to further enrich the product structure.
Lithium mining giant Tianqi Lithium has entered the new energy vehicle track. Tianqi Lithium recently announced that its wholly-owned subsidiary joined hands with Geely Holding Group and Mercedes-Benz to participate in SM’s A-round equity financing with US$150 million of its own funds, and subscribed for 17.606 million Class A ordinary shares issued by it.
Ganfeng Lithium also agrees with Tianqi Lithium. Ganfeng Lithium's strategic investment in Dongfeng Lantu completed the industrial and commercial change at the end of January. This is the second order Ganfeng Lithium has placed in a new energy vehicle company after investing in GAC Aian in 2022. At the same time, Ganfeng Lithium will also set its sights on the power battery track. The company announced on the evening of July 20 that its subsidiary, Ganfeng Lithium, intends to invest in the construction of a lithium battery production project in Chilechuan Dairy Development Zone. The project will be constructed in two phases, of which the first phase will build a lithium battery project with an annual output of 10GWh, with a planned investment of no more than 6 billion yuan.
It is worth mentioning that no matter whether it is rising sharply or falling sharply, the sharp fluctuations in the price of lithium carbonate are not good for the development of the industry. With the listing of lithium carbonate futures options, the risk of large fluctuations in lithium carbonate prices is expected to be suppressed.
After planning for a long time, the long-awaited lithium carbonate futures contract will be listed and traded on the Guangzhou Futures Exchange today, and the lithium carbonate option contract will be listed and traded from July 24.
"As an upstream manufacturer, we are very happy to see the listing of lithium carbonate futures, and the price of lithium carbonate is expected to be stabilized." A related person from Zangge Mining told reporters that the company has applied to Guangzhou Futures Exchange for the qualification of a lithium carbonate designated delivery factory warehouse. In the future, it will consider choosing an appropriate time to participate in it based on the company's actual situation, assist the company's production and operation activities, and improve the company's ability to resist risks and profitability.
According to analysts in the futures industry, futures, as a risk hedging tool, will stabilize the price fluctuations in the lithium carbonate market. Enterprises can also reduce production and operation risks through hedging and other methods, and promote the healthy development of the new energy industry.
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