Source of this article: Times Finance Author: Liao Wei
The price of lithium resources remains high, and downstream car companies that have to passively accept the price increase of upstream materials have begun to choose to take the initiative.
On the 13th, it was reported that Chile gave two of the five lithium mining contracts to BYD Chile and Seriosy Mineras del Norte. BYD bid $61 million and Serviciosy Opperciones $60 million, awarding a quota of 80,000 tons of lithium production per contract. In this regard, BYD told Times Finance on the same day that "the news is true, but there is no more information to disclose for the time being."
In addition to BYD, according to foreign media reports quoted by the Financial Associated Press, Tesla announced on January 11 that it signed a six-year contract for the supply of 75,000 tons of nickel, which is its first nickel supply agreement in the United States.
Source | Internet
Lithium and nickel are important raw material metals for the preparation of power batteries, for BYD, Tesla layout of the upstream of the new energy industry chain, a domestic commodity market information supplier internal analyst told Times Finance on January 13, "The active layout of the upstream, is in the context of the soaring price of raw materials, downstream car companies and midstream power battery manufacturers in order to reduce cost pressure, strengthen the industrial chain to control resources, enhance their own voice of the important means."
It is understood that in July 2021, Tesla signed a nickel supply contract with the western nickel industry under the Australian mining giant BHP Billiton; in October last year, Tesla signed a procurement contract with Proni Resources, a mining company based in New Caledonia, planning to purchase about 42,000 tons of nickel. Since 2018, CATL has also continuously invested heavily in the shares of upstream companies such as north American lithium industry, North American nickel industry, and Australian lithium mining company Pilbara Minerals, with the intention of improving the layout of the industrial chain. In November 2021, The American Lithium Industry, in which Ganfeng Lithium invested, acquired Canada's Millennium Lithium industry at a premium of $400 million, which aroused industry concern.
"Many small and medium-sized enterprises can not affect the upstream because of their weak strength, they can only passively accept price increases, and their profits have almost been swallowed up, and now some of them can no longer do it, completely 'lying flat'." Some insiders told Times Finance that "the head enterprise can also maintain the dilution cost through the upstream layout."
"Nickel is our biggest concern in lithium battery production. That's why we're replacing the standard-mileage version of an electric car with an iron-lithium battery. Iron-rich lithium batteries. In February 2021, Tesla CEO Musk said on social platforms. On Tesla's second-quarter 2020 earnings call, Musk also called out to upstream mining companies, "If you mine nickel in an environmentally friendly and efficient way, Tesla will give you a long-term large contract."
Ganfeng Lithium Jiangxi Xinyu Factory | The source of the picture is the official website of the enterprise
According to industry insiders, Australia and South America are currently important bases for the global supply of lithium resources, but due to the impact of the epidemic, the operating rate and output of local mining areas are insufficient, far from meeting the expanding downstream demand in the past two years.
In the case of a serious mismatch between supply and demand, upstream raw materials have also entered a soaring market. According to the data of the golden investment network, from the beginning of 2021 to the 13th of 2022, the price of Shanghai nickel rose by 20%, although it is the highest price record in history, it still shows an upward trend and there is no sign of decline. The price of battery-grade lithium carbonate, lithium hydroxide and magnesium will increase by 400%, 317% and 214% respectively in 2021.
The data shows that since the end of 2020, raw materials have been rising. Taking lithium carbonate as an example, the price of the material was only about 40,000 yuan per ton at that time, and now it has risen to 300,000 yuan / ton. The above-mentioned analysts said, "Although the upstream cost has risen, it is certainly not as good as the price increase, and the profit in the middle can be imagined."
"The so-called epidemic has caused insufficient output or overseas miners have deliberately done it, and now the soaring prices of ore and raw materials are also what they are happy to see, and they are the beneficiaries." The analyst said that "the rise in raw material prices is also mainly due to the cost pressure brought by the mine, of course, the mentality of material suppliers to press goods is also the reason." According to the analyst, at present, whether it is the domestic market or the foreign market, there is a situation where upstream material suppliers press the goods.
Previously, a domestic material supplier told Times Finance, "Our industry, if we predict the market, more or less will hoard some goods, in this big market will definitely make money." If you don't stock up on goods, you may make a small profit. We have a certain amount of hoarding, but the amount of in and out is relatively large, and there are not many hoards at present. This year's market is definitely profitable for us, or it is quite good."
According to data from the China Association of Automobile Manufacturers, in 2021, the production and sales of new energy vehicles in China reached 3.545 million units and 3.521 million units respectively, an increase of 1.6 times year-on-year, and the market penetration rate reached 13.4%, 8 percentage points higher than in 2020. For the development of new energy vehicles in 2022, many people in the industry are very optimistic. CICC Research Report pointed out that looking forward to 2022, it is expected that the demand of the automotive industry will grow steadily, the penetration rate of new energy will increase rapidly, the intelligence will accelerate, and the industrial transformation will arrive.
In this context, the industry also expects the price of raw materials such as lithium carbonate and nickel to further rise. The analyst said, "Downstream demand is too strong, the mismatch between supply and demand is difficult to alleviate for a period of time, and raw material prices will continue to rise." Recently, Guojin Securities released a lithium expert exchange report that the increase in lithium carbonate production is quite limited, but the demand increase is sufficient and is likely to rise to 500,000 / ton.
However, considering the impact of rising prices of raw materials such as lithium on the domestic new energy industry, the above analysts analyzed that if the price remains high, the government will definitely intervene and take certain regulatory measures. Recently, Mo Ke, founder of the True Lithium Research Institute, also pointed out that "the downstream demand is too strong, and the phenomenon of resource card neck in 2022 may be more prominent, and the competent authorities will not be willing to see the development results of the domestic new energy industry harvested by foreign countries." Perhaps the demand will be appropriately curbed at that time, and some policies will be introduced to curb the overheating of electric vehicles. ”