Per reporter: Zhu Chengxiang Huang Xinlei An Yufei Per reporter: Zhang Haini
Image source: Visual China
On the evening of March 17, gas stations in many places lined up. At 24:00 that night, a new round of refined oil price adjustments will arrive. Oil prices are getting more and more expensive, will it be more cost-effective to buy new energy vehicles?
Tesla's answer is that the price has increased three times in 8 days. On March 10, March 15, and March 17, Tesla China's official website successively adjusted the prices of its Model 3 and Model Y models.
The reason for Tesla's price increase is largely due to the increase in the price of upstream raw materials. In particular, lithium carbonate, in early March, the price of battery-grade lithium carbonate exceeded 500,000 yuan / ton. A year ago, the price of battery-grade lithium carbonate was less than 90,000 yuan / ton, up more than 5 times a year.
Source: Wind, Antec
There are many new entrants, and the demand is growing rapidly
Why are the prices of lithium carbonate rising so fast? "The core is the imbalance between supply and demand." A number of industry professionals and analysts share similar views.
Across the country, the expansion of new energy batteries and midstream material factories is in full swing. Recently, Longbai Group has built a production capacity of 50,000 tons of lithium iron phosphate.
At noon on March 17, Longbai Group announced that in February 2022, the annual output of 50,000 tons of lithium iron phosphate production line has entered the trial production stage. In the trial production stage, through multiple phased equipment debugging and material testing, product quality testing is qualified and some downstream customers have obtained qualification recognition, and the conditions for production are now available.
The 50,000-ton lithium iron phosphate cathode can supply more than 400,000 new energy vehicles. It should be known that the national sales of new energy vehicles in 2021 will be 2.446 million units.
According to the Shanxi Securities Research Report, the cathode material of the 1GWh lithium iron phosphate battery is 2300 tons of lithium iron phosphate. According to this calculation, 50,000 tons of lithium iron phosphate can produce 21.74 GWh. According to data from SNE Research, a South Korean market research institute, global sales of new energy vehicles from 2019 to 2021 were 2.21 million units, 3.24 million units and 6.5 million units, and the installed power batteries were 115.21GWh, 146.7GWh and 296.8GWh, respectively, that is, the corresponding sales volume per GWh shipment was 19,100 units, 22,100 units and 21,900 units, respectively. Therefore, conservatively calculated at 20,000 vehicles produced per GWh, 50,000 tons of lithium iron phosphate batteries can produce about 434,800 vehicles.
The 50,000 tons is only the first phase of Longbai Group's planning. If the project is fully completed, Longbai Group will have a production capacity of 200,000 tons of lithium iron phosphate, corresponding to 86.96GWh and 1.7391 million vehicles. According to the data of the China Automotive Power Battery Industry Innovation Alliance, the installed capacity of lithium iron phosphate batteries in 2021 will be 79.84GWh.
It should be known that Longbai Group did not produce lithium iron phosphate cathode before, it is a titanium dioxide manufacturer. In fact, traditional chemical companies like Longbai Group are racing into the lithium iron phosphate cathode industry.
The main materials for the production of lithium iron phosphate cathode are iron phosphate and lithium carbonate.
Regarding the soaring price of lithium carbonate, Sheng Yitang, an analyst at Zoomlion Gold Cobalt Lithium, told the "Daily Economic News" reporter: "The most important thing is the mismatch between supply and demand in the current market expansion cycle, as well as the tight supply of raw materials in the medium and long term. Lithium salt smelters, cathode material manufacturers and battery factories have capacity expansion plans, new production lines continue to land, the expansion cycle ranges from half a year to two years, but the growth rate of raw material supply is far less than the growth rate of demand expansion. ”
Crazy expansion
As Sheng Yitang said, the midstream lithium salt smelters, cathode material manufacturers and downstream lithium battery factories are all frantically expanding production capacity. In particular, cathode materials and batteries are constantly entering new forces.
For example, Longbai Group signed a strategic cooperation framework agreement with Tianjin Jiewei Power Industry Co., Ltd. (hereinafter referred to as Jiewei Power) on March 7. Gateway Power is not one of the top lithium battery manufacturers in China, but it is also actively expanding its production capacity. According to its official website, the company has laid out five major production bases in Tianjin, Jiaxing, Yancheng, Changxing and Chuzhou. The total investment of the Chuzhou production base will reach about 10 billion yuan, with a planned production capacity of 20GWh, which is scheduled to be put into use by the end of 2023. By 2025, JV Power plans to achieve a total production capacity of 100GWh.
It should be noted that according to SNE Research data, the loading volume of CATL in 2021 is only 96.7GWh.
New forces are entering, and traditional powers are also expanding wildly. According to the statistics of high-tech lithium batteries, the total investment in the capacity planning projects of domestic power battery enterprises in 2021 will exceed 620 billion yuan.
In 2021, battery companies such as CATL, BYD, China New Aviation, Hive Energy, and EWELL Lithium Energy have announced a number of expansion plans. Yingda Securities Research Report predicts that the total production capacity of domestic power battery companies will exceed 3TWh by 2025. Among them, NINGDE Times, BYD, Hive Energy, AVIC Lithium Battery, Guoxuan Hi-Tech, Yiwei Lithium Energy, Lishen Battery, fu Neng Technology 2025 production capacity targets are 670GWh, 600GWh, 600GWh, 500GWh, 300GWh, 200GWh, 100GWh and 100GWh, respectively, with a total production capacity target of 3070GWh.
In 2021, the global power battery loading volume was 296.8GWh, and the cumulative domestic power battery loading volume was 154.5GWh. This means that the production capacity target of 3TWh will be 10 times the global power battery loading capacity in 2021 and nearly 20 times the domestic vehicle loading capacity.
New entrants who continue to enter the industry, cathode material manufacturers, battery manufacturers continue to expand, such an expansion is rational?
Zhao Bin, a battery industry analyst at the Head Leopard Research Institute, believes that "the lithium battery industry has a high concentration, the head cathode material factory and the battery factory have formed a stable upstream and downstream cooperative relationship, and there are long-term orders, so the expansion plan of the head battery factory and the cathode material factory comes from the response to terminal demand, not blind expansion, behind the radical expansion plan is the continuous optimism of the global new energy vehicle market demand from 2022 to 2025, and the beginning of new energy vehicles in 2022 also confirms this expectation." ”
Such a high lithium price, can the middle and lower reaches of the river withstand it?
"In 2021, the development of China's new energy vehicle market far exceeds expectations, whether it is lithium iron phosphate batteries or ternary lithium batteries, lithium resources are its most important raw materials." Zhao Bin told the "Daily Economic News" reporter.
It can be seen that the rise in lithium prices is gradually transmitted by the downstream, and the activities of the new energy vehicle market have driven the expansion tide of power battery manufacturers, thereby driving the expansion of cathode material manufacturers and the expansion of lithium salt manufacturers. Before 2021, the upstream is precisely in the trough period, and a large number of mines and salt lakes will stop production.
Brine pumped from the Qarhan Salt Lake. Image source: Per reporter Xu Shuai photographed (data map)
Zhao Bin said: "Before 2021, the prices of lithium carbonate and lithium hydroxide will continue to decline, even only about 40,000 yuan / ton, mines and salt lakes will stop production in large quantities, and the original expansion plan will be postponed." The surge in downstream resources obviously exceeds the original mining expectations at the mine end, and it takes a certain amount of time to restore production capacity and climb the capacity of new production lines, coupled with the impact of the epidemic, Australia and South America have insufficient resource mining manpower, production capacity is not up to expectations, and the demand gap cannot be alleviated for a long time. This imbalance between supply and demand has triggered a sustained strengthening of lithium prices in the second half of 2021. ”
"(At the current price level of lithium carbonate, cathode material companies are going to lose money in production." Mo Ke, chief analyst of true lithium research, pointed out.
So, in the face of soaring lithium carbonate prices, what should cathode material manufacturers do? Mo Ke believes: "There are not many methods that cathode material companies can take, and purchasing raw materials in advance is one." At present, in the case of continuous rise in resource prices, cathode material companies earn a price difference between raw material inventories. From a certain point of view, the current cathode materials enterprises are competing for financial strength. Rich enterprises hoard a little more raw materials and make money by playing the time difference. ”
During the Spring Festival, middle and lower reaches of the manufacturers have hoarded goods, and even grabbed goods. Sheng Yitang also mentioned: "Due to the suspension of logistics during the Spring Festival holiday, the uncertainty caused by the epidemic and the continuous high price of multiple factors, the anxiety of middle and downstream manufacturers in purchasing and ensuring supply has been aggravated." Before and after the Spring Festival holiday, the mood of grabbing goods in the middle and lower reaches is more serious, and manufacturers basically rely on grabbing goods. From the beginning of January to the end of the Spring Festival holiday in February, in just over a month, the spot of electric carbon (battery-grade lithium carbonate) has increased from 300,000 / ton to 400,000 / ton, and the unit price has soared by 100,000. ”
"Midstream manufacturers can rely on pre-stocking to ensure short-term production, which is also a reason why they can maintain a wait-and-see view on lithium salt prices and the procurement is weak." Sheng Yitang added.
The response of cathode material manufacturers and battery manufacturers also proves this. The staff of Longpan Technology, a listed company of cathode materials, told the "Daily Economic News" reporter: "At present, the process of lithium carbonate is still very tight, but there is no problem with our (raw material) supply. On the one hand, some of our 2022 demand has signed long orders; the other part is in timely procurement, and we have maintained the inventory required for production for nearly a month. ”
In terms of battery manufacturers, Fu Neng Technology replied to the "Daily Economic News" reporter: "Fu Neng Technology insists on establishing a mutual trust and win-win cooperative relationship with raw material enterprises to jointly maintain and promote the healthy development of the industry, for example, the strategic cooperation agreement signed between the company and Huayou Cobalt at the end of last year includes the procurement of 161,500 tons of ternary precursors." ”
In addition to long orders and hoarding, another option for midstream cathode material factories and battery factories is to transmit prices to terminal car factories and increase prices downstream.
The cost of single vehicle materials rose by more than 30,000 yuan year-on-year, which is the price increase of 600 kilometers of lithium iron phosphate new energy vehicles. According to the research report released by Shanxi Securities on March 9, the total price of the main raw materials per 1GWh lithium iron phosphate battery was 659 million yuan, up 9.94% month-on-month and 158.68% year-on-year. Among the various materials, lithium iron phosphate cathode rose in the front, an increase of 238.14%. Among them, the price difference of 600 kilometers of lithium iron phosphate cathode single vehicle is 20,200 yuan.
In terms of ternary batteries, the 600 km endurance NCM811 has a price difference of 25,800 yuan per 1GWh ternary material cathode bicycle.
Regarding price transmission, Lopal Technology staff said: "The price of lithium carbonate has exceeded 500,000 / ton, such a trend on the downstream pressure is very large, including automakers and battery factories, whether this price can be maintained is also difficult to say, so far there has been no impact on the company." Because the company is now fully able to transmit the pressure of price increases, the sales price of lithium iron phosphate has reached 160,000 yuan / ton. ”
Where will lithium prices go in the future?
Is the price of lithium carbonate of 500,000 yuan / ton reasonable? What is the future?
At present, the upstream supply is still tight, Sheng Yitang believes: "Salt lake into the winter after a large number of shipments, into April, May, with the temperature rise, Qinghai salt lake shipments will steadily climb to full production, but the domestic salt lake new capacity during the year is limited." 80% of the lithium mine's production capacity landed overseas, and most of the output was signed out in the form of underwriting. This year's tight supply pattern is difficult to change. ”
Endless salt pans. Image source: Per reporter Xu Shuai photographed (data map)
For the trend of lithium prices, Zhao Bin believes: "The rapid strengthening of demand has widened the gap between supply and demand of lithium resources in 2022, and it is expected that the high price of lithium will continue into the middle of the year." If the waist and tail material factories in the second half of 2021 are short of lithium, by 2022, the head material factory has also been out of stock, although there is no shortage of lithium from the perspective of the total global reserves of lithium resources, but there is indeed a shortage of supply in the short term, and in the future, with the gradual exploitation of resources and the landing of expansion plans, lithium prices will tend to be stable. ”
Fu Neng Technology also believes that lithium prices will remain high in the short term, "500,000 / ton (of) spot prices, although higher than the long-term price in the industry, but also reflect the tight supply of the market state." Due to the long upstream expansion cycle and the strong downstream demand, the price of lithium carbonate will remain high in the short term. ”
In the face of such a high lithium price, how to deal with the midstream?
Can I still stockpile goods now? Zhao Bin said: "From the current market situation, the risk of hoarding lithium is very high. At present, the lithium price of 500,000 / ton has seriously deviated from the basic market, and the growth rate since the beginning of 2022 is also extremely rare, whether it is a trader or a material factory, the risk of a large number of hoarding goods at such a point in time is extremely high. Due to the tight supply is indeed no goods to hoard, after all, the substantial expansion of downstream power battery factories has brought a large number of orders, and the orders of some material factories may have been queued to half a year later, so we feel that the inventory of each link has been basically consumed, and the imbalance between supply and demand is a true portrayal of the market. ”
If the inventory is consumed, what should the middle and downstream manufacturers do?
In fact, the soaring lithium price has also caused a rebound in the middle and lower reaches, and even after the price of lithium carbonate exceeds 500,000 yuan / ton, the middle and lower reaches of the manufacturer do not buy goods to take orders. So, will the downstream reduce orders and force lithium carbonate to reduce prices?
Fu Neng Technology told the "Daily Economic News" reporter: "At present, Fu Neng Technology does not have the situation of reducing orders, the company's orders this year have reached 14.81GWh, and the current products are in short supply." At the same time, the company actively establishes closer cooperative relations with precursors, cathodes and other manufacturers, and has market competitiveness at both ends of the volume and price. ”
"This is a normal wrestling between supply and demand sides in the market. For cathode material companies, if the price of lithium carbonate is expected to rise, it can only reduce production, in other words, everyone will make such a decision. Moko thought.
Sheng Yitang also said: "At present, (middle and downstream manufacturers) continue to produce the possibility of losing money, the price of battery-grade lithium carbonate above 500,000 / ton is not connected to many downstream, the recent battery-grade lithium carbonate quotation is basically flat, and the mood of the market has turned to wait and see." The bargaining power of the leading middle and downstream manufacturers is acceptable and can maintain a certain profit, but it will be very difficult for small and medium-sized manufacturers to be sandwiched between lithium salt smelters and terminal car companies, and the intermediate links of the industrial chain will also face a reshuffle. ”
The market is clear, can it force the price of lithium to fall? "If there are 3 lithium carbonate supply companies and 30 cathode material suppliers in the market, then the seller is very easy to engage in price collusion, and the buyer is the weaker party." Now there are more companies entering the market, and there are 100 cathode material companies, which is not more beneficial to the seller. If there is no external intervention, then, it is not difficult to judge that only when the cathode material companies cannot survive, and 100 have returned to 30 or even less, the price of lithium carbonate will come down. Mercure analyzed.
However, Zhao Bin believes: "Although the concentration of the cathode material industry is relatively high, the competition for market share between the head enterprises is also fierce, and the technical threshold of lithium iron phosphate cathode material is not very high, and there is a risk that the company will rush to stop work and resist." Therefore, it is difficult to resist price increases to truly alleviate the crisis, and ultimately it is necessary to accelerate resource extraction to alleviate the imbalance between supply and demand. ”
In the face of the tight supply of lithium resources, the relevant authorities are already taking action. The vice minister of the Ministry of Industry and Information Technology said at the press conference of the State Council New Office on February 28 that this year will focus on meeting the production needs of power batteries, moderately accelerate the development progress of domestic lithium, nickel and other resources, and crack down on unfair competition such as hoarding and price gouging. At the same time, improve the power battery recycling system, support efficient dismantling, recycling and other technical research, and continuously improve the recycling rate and resource utilization efficiency.
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