“I used to try my best to find people to buy lithium carbonate, but recently many channels have come to me to sell lithium carbonate.” An insider from a cathode material factory in the southwest told a Securities Times e Company reporter, The price is obviously much easier to negotiate than before.
As the above-mentioned person said, lithium carbonate has recently shown signs of stopping its rise and stabilizing after its rapid rise. According to a research report from Everbright Securities, the price of battery-grade lithium carbonate last week was 570,000 yuan/ton, the same as the previous week, and it was the first time in the past 18 weeks that the price had stopped rising. Data from Shanghai Steel Federation shows that the average price of battery-grade lithium carbonate stood at 590,000 yuan/ton in mid-November, and then remained stable for more than ten consecutive days. Recently, it has shown a downward trend. The average market price on November 29 was 582,500 yuan. / ton, which has dropped by 0.75 thousand yuan / ton from the previous high.
In the opinion of most interviewees, the recent downstream demand for new energy vehicles has been lower than expected, the overall upward purchasing sentiment in the industrial chain is not high, and the results of the upstream and downstream games are unclear. The stabilization of lithium carbonate is in line with transaction logic; however, at this stage After the pessimism gradually dissipates, the price trend of lithium salts still depends on the market supply and demand pattern, and will remain high and volatile in the short term. As for when the price turning point will arrive, it depends on the matching of mine-end production expansion and downstream demand.
Traders panic and ship at low prices
The recent loosening of lithium carbonate prices began on November 14. On that day, the prices of multiple lithium carbonate forward contracts operated by the Wuxi Stainless Steel Electronic Trading Center fell by more than 6%, among which lithium carbonate 2302, 2303, etc. all recorded the largest declines in the history of the contract; at the same time, the middle and upper reaches of the lithium battery industry chain appeared on the market There were rumors of production cuts or even order cancellations. Although leading battery manufacturers such as CATL, Everview Lithium Energy, and Guoxuan Hi-Tech subsequently denied the rumors, panic seems to have begun to spread.
“Traders are obviously guided by emotions. Once they find something wrong, they will panic selling.” The aforementioned cathode material factory said that by the end of the year, traders’ demand for withdrawing funds will also be relatively clear. In the near future, There are more low-priced supplies on the market, and buying lithium carbonate is not as difficult as before. In the past, we tried our best to find people to buy lithium carbonate, but recently, many channels have come to us to sell lithium carbonate.
“Although traders have a small supply of goods, price fluctuations are more obvious and will have a certain impact on manufacturers’ shipment prices.” Qu Yinfei, a lithium battery industry analyst at Longzhong Information, told the Securities Times ·E company reporter, once the price of lithium carbonate in the hands of traders loosens, it will quickly attract downstream customers to buy, diverting existing procurement channels. Lithium carbonate manufacturers sense that customers are not interested in purchasing at high prices, so they make adjustments to the price. Make certain adjustments. Not only that, the increase in low-price supply will also create an atmosphere of sufficient market supply, increase the bargaining chips of downstream customers and lithium salt manufacturers, thereby suppressing the price of lithium carbonate.
According to data from Shanghai Steel Union, the average market price of battery-grade lithium carbonate on November 29 was 582,500 yuan/ton, which was 7,500 yuan/ton lower than the previous high; the average market price of this product in Shanghai Nonferrous Metals It has remained at 567,000 yuan/ton since November 22. According to a research report from Everbright Securities, the price of battery-grade lithium carbonate last week was 570,000 yuan/ton, the same as the previous week, and it was the first time in the past 18 weeks that the price had stopped rising.
Qu Yinfei said that the current shipping price of battery-grade lithium carbonate by traders on the market is between 575,000 yuan/ton and 580,000 yuan/ton, and the manufacturer’s price will be slightly higher. , approximately between 580,000 yuan/ton and 590,000 yuan/ton.
It is worth mentioning that downstream customers generally have a mentality of buying up and not down. The more lithium carbonate prices stagnate, the weaker the downstream purchasing desire seems to be.
“Recently, it is obvious that the frequency of customer inquiries is not as high as before, and the willingness to purchase has begun to weaken.” A lithium carbonate manufacturer in central China said frankly that the upstream and downstream are now in a stalemate, with raw material acquisition, The trading of lithium carbonate is almost at a semi-stagnant state, and this situation is expected to remain until the end of December.
Downstream demand is lower than expected, triggering sentiment transmission
In the opinion of most interviewees, the underlying reason why the current price of lithium carbonate has stopped rising is that the recent downstream demand for new energy vehicles has been lower than expected, and the industry Chain optimism has subsided.
Data from the Passenger Car Association shows that in October this year, new energy vehicle sales were 556,000, a year-on-year increase of 75%, but a month-on-month decline of 9%. The market had previously expected that the national subsidy would be reduced in the first four quarters. The rush to dress up did not come as expected.
According to actual research by reporters from Securities Times·e Company, in November, most car companies have launched fancy promotions such as price cuts and preferential rights, and the delivery cycle of most non-newly launched new energy vehicle products is longer than before. All have been shortened.
“The overall performance of the downstream industry is not as good as expected. Coupled with the withdrawal of state subsidies, the market’s expectations for the first quarter of next year are not particularly optimistic. The overall purchase intention of the lithium battery industry chain has weakened, and the terminal and midstream are It is in the destocking stage," Qu Yinfei told a Securities Times e Company reporter.
The aforementioned cathode material factory also said that the traditional off-season for consumer lithium batteries is from January to April. Due to the withdrawal of subsidies and raw material price issues, it is very likely that January-March next year will also be the off-season for power batteries. After the items are superimposed, the market has strong expectations for weak demand in the first quarter of 2023. After the pessimism is transmitted upward, it will inevitably suppress the price of lithium carbonate.
A lithium battery investor in South China believes that with the withdrawal of state subsidies for new energy vehicles next year, OEMs’ pricing strategies for batteries and other components need to be adjusted. This is a process of re-gaming, and in the results of the game Before the announcement, industrial chain companies will not blindly accumulate inventory, but tend to pack lightly.
However, the short-term stop of the price increase of lithium carbonate does not seem to mean that the price turning point has arrived. "The current price trend reflects more of a market sentiment. In fact, the overall procurement situation is still tight. It can only be said that the demand for lithium carbonate has been delayed in stages." The aforementioned lithium carbonate manufacturer said that according to our exchanges with downstream manufacturers In this situation, lithium salt prices still have strong support, and the follow-up will depend on the terminal market sales data.
Qu Yinfei said frankly that the quality of lithium carbonate on the market is uneven. Although the supply of goods in circulation has increased, standard battery-grade lithium carbonate is actually still in short supply. It is expected that lithium carbonate will still maintain a high and volatile trend before the end of the year.
When will the price turning point arrive?
As a choke point in the industrial chain, the rise and fall of lithium ore and lithium salt prices has been affecting the market, and the industry has never stopped discussing the turning point of its supply and demand pattern.
On November 16, a new round of lithium concentrate auction of the Australian Pilbara Mining Company, which is regarded as the "lithium price vane", was held. The final transaction price was US$7,804/ton, which was higher than the previous auction price. The price increased by US$549/ton, an increase of 7.6%, which is equivalent to the cost price of lithium carbonate of approximately 580,000 yuan/ton, which is basically the same as the current market price.
Supported by the cost of lithium concentrate, it may be difficult for lithium carbonate to decline in the short term. Tianqi Lithium said that the trend of lithium prices mainly depends on factors such as the overall supply and demand pattern of the lithium industry, market changes and economic conditions. From the perspective of demand, the company is confident in the long-term development of the new energy industry; from the perspective of supply, the expansion of production in the downstream of the industry is usually smoother and has a shorter cycle, while the development of upstream resources is often subject to geographical restrictions, weather changes, environmental protection requirements, and policies. Affected by various factors such as constraints, reserve scale, mining difficulty, and infrastructure conditions, the production expansion cycle is longer and the corresponding risks are also greater. Under the mismatch of upstream and downstream production expansion cycles, the supply of lithium products will continue to be in a relatively tight situation in the short to medium term, and it will take some time for the supply and demand pattern to achieve a true balance. Jiangte Electric also believes that the time cycle from discovery to mining of lithium ores is relatively long, and the contradiction between supply and demand may continue for a long time in the future.
The West China Securities Research Report pointed out that in 2023, global lithium raw material production is expected to be approximately 1 million tons of lithium carbonate equivalent, maintaining a balance with the expected downstream demand next year, but it does not rule out that supply-side projects will once again be lower than expected. The situation has arisen, and the new construction and expansion of upstream resource-side projects are lower than expected or it is the norm in the industry.
Recently, many industry figures have made predictions about the turning point of lithium salt prices. At the recently held annual meeting of Gaogong Lithium Battery, Zhang Xiaofei, chairman of Gaogong Lithium Battery, predicted that the tight supply and demand for lithium carbonate will continue in the first half of 2023, and the price of lithium carbonate will most likely remain above 520,000 yuan; supply and demand will begin in the second half of the year As the relationship eases, it is expected to remain above 450,000 yuan; by 2024, the price of lithium carbonate is expected to drop below 400,000 yuan. Xu Jinfu, chairman of Tianci Materials, said that the price of lithium carbonate will fall below 200,000 yuan/ton in five years, but there is a high probability that it will not fall below 125,000 yuan. Liu Jincheng, chairman of Yiwei Lithium Energy, also said that it is expected that the price will eventually drop below 200,000 yuan/ton. In the next few years, the entire industry chain, starting with lithium mines, will be in surplus.
Of course, the healthy development of the lithium battery industry also depends on the cooperation between the upstream and downstream industry chains. On November 18, the Ministry of Industry and Information Technology and the State Administration for Market Regulation issued a notice on the coordinated and stable development of the lithium-ion battery industry chain and supply chain, pointing out that the domestic lithium battery industry chain has a serious periodic supply and demand imbalance and poor upstream and downstream docking. Hoarding and unfair competition occur in the industry, while production capacity in some links is expanded blindly, and low-quality and low-price competition occurs from time to time. Based on this, the notice requires the competent authorities and enterprises in the industry to adhere to scientific planning, strengthen the docking of supply and demand, establish long-term mechanisms through signing long-term orders, technical cooperation, etc., guide upstream and downstream to stabilize expectations, clarify volume and price, ensure supply, and win-win cooperation ; At the same time, strengthen supervision and inspection to ensure the supply of high-quality lithium battery products.