Produced 丨 Tiger Sniff Car Group
The author 丨 thoughtful
Editor 丨 Zhang Bowen
Header 丨IC Photo
The moon has clouds and clouds, people have bad luck, and so is the price.
According to data from Gelonghui on April 27, the price of a variety of lithium battery raw materials continued to decline. Among them, the real-time quotation of battery-grade lithium carbonate that car companies are most concerned about is 465,000 yuan / ton, compared with the highest point of this month of 502,500 yuan / ton, which has fallen by 37,500 yuan; the average price of electrolytic cobalt is 554,000 yuan / ton, down 1,500 yuan; lithium hexafluorophosphate is reported at 327,500 yuan / ton, down 25,000 yuan; the electrolyte used in lithium iron phosphate batteries is 95,500 yuan / ton.
Obviously, the decline in lithium carbonate materials is a good thing for the majority of car companies and consumers, but the relevant agencies generally believe that the recent phased "plunge" of lithium battery materials is temporary, mainly due to the recent increase in lithium salt supply, China's auto industry forced to stop production in a large area, and consumer demand has been curbed by epidemic prevention and control measures. With the limited increment of the mine end this year, and the continuous resumption of work and production of the new energy automobile industry downstream of the industrial chain, the price of lithium battery materials, especially lithium carbonate, is likely to continue to rise and maintain a high level.
Obviously, the price of battery materials has now exceeded the cost expectations of all car companies. This is why since the end of February this year, almost all new energy vehicles at home and abroad have begun to announce price increases. Low-cost micro-electric vehicles such as Changan Ben E-Star National Edition, Euler White Cat and Black Cat directly announced that they would stop accepting new orders.
For China's auto industry, the rise in oil prices in the past has at most affected the sales of large-displacement models. Today, the continuous high price of battery raw materials may be related to the survival of automobile companies.
In other words, the story of China's electric vehicles cannot be told.
The embarrassing situation of a new energy vehicle power
According to the information of the Ministry of Industry and Information Technology, in the first quarter of 2022, the cumulative production and sales of new energy vehicles in the mainland reached 1.293 million units and 1.257 million units, and the market penetration rate reached 19.3, an increase of 5.9% over the whole year of 2021, and the industry has entered a new stage of large-scale and rapid development. In fact, the terminal retail stores of some car brands have said that even in non-restricted cities, a considerable number of consumers have given priority to whether there are new energy vehicles on sale after entering the store.
However, the "heart" of new energy vehicles, the raw materials for lithium batteries, are not in the hands of Chinese people. According to the analysis and research report of Huaxi Securities, the external dependence of lithium resources in the mainland is as high as 85%. It should be known that the foreign dependence of mainland oil will only be 72% in 2021, down 1.6% from the previous year.
If you only look at the numbers, this situation is somewhat incredible. According to the current exploration data, by 2020, the continental lithium resource reserves will be about 1 million tons of lithium metal equivalent, ranking fourth in the world with 6% and nearly twice the reserves of the United States, which ranks fifth. But the problem is that these lithium mines, if they want to develop, can be described as each with their own difficulties.
First of all, let's first popularize some industrial and geological knowledge. In the process of manufacturing lithium battery cathode materials and electrolytes, lithium carbonate is the intermediate product and key product. Lithium carbonate is divided into industrial grade and battery grade, of which the latter lithium carbonate is more pure. In nature, lithium is mainly in the three forms of spodumene, lithium mica, and salt lake lithium. Among them, the lithium resources of the mainland are mainly salt lake lithium, accounting for 83%. It is followed by spodumene, accounting for 15%. Finally, lithium mica, accounting for 2%.
At present, the technical route for manufacturing lithium carbonate is mainly divided into the following two types:
First, ore to extract lithium. This technology has a long and relatively mature history, and the main raw material is spodumene concentrate. Its chemical composition is stable, the process is easy to control, and it is relatively easy to manufacture high-purity rational products. Compared to spodumene, lithium mica exists in the form of silicates, and its tight structure makes it more complex to process and more expensive.
Second, lithium extraction from salt lakes. At the level of resource reserves, salt lake lithium is higher than ore lithium, and the cost of preparing industrial-grade lithium carbonate is lower. However, its disadvantage is that some salt lakes have more impurities, especially the magnesium ion content is too high, and the similar chemical properties of magnesium and lithium make it difficult to separate the two, so it is more difficult to manufacture battery-grade lithium carbonate. Of course, for high-quality salt lakes, that is, the higher the lithium content, the better the processing.
From the perspective of the form of the lithium resources segment and the quality of mineral deposits in the mainland, the above two technical routes have brought serious problems.
First, China's spodumene is mainly distributed in western Sichuan, with larger reserves of methyl card, wood wool and Lijiagou mines with an average grade of about 1.3% to 1.6%, lower than the average grade of 2.0% in Telison, Australia. Although on paper, the overall cost of domestic lithium mining and transportation is lower than that of imports from Australia. However, due to the fragile natural environment in western Sichuan, local governments have been cautious about the exploitation of these minerals in the past. Therefore, for a long time, major enterprises, including Tianqi Lithium and Rongjie Shares, only used the minerals in these areas as the company's reserve resources. Now, with the soaring price of lithium carbonate, these mines are partially under construction work. However, the mining of lithium ore takes one and a half years, of which the development and construction cycle takes 12 months, and another 6 months is needed for commercial production. Therefore, if you want to use this ore as soon as possible, you will get the end of this year.
The second is the lithium extraction of salt lakes that has attracted much attention since the previous year. At present, the lithium resources of the salt lake in the mainland are mainly concentrated in Qinghai and Tibet provinces and autonomous regions. Among them, the Qinghai salt lake is mainly distributed in the Qaidam Basin, including the Qarhan Salt Lake, the East Tai Jinnell Lake and the West Tai Jiner Lake; the Tibetan salt lake is concentrated in the western Tibet region, including Zabuye, Dangxiongcuo, Bangorcuo, Jiezechaka and other salt lakes.
Listening to the name, I believe you can see that the traffic in these places is not very convenient. In fact, even in the Qaidam Basin, its lowest altitude is above 2600 meters. Not to mention, the average altitude of the entire Tibetan Plateau is already above 4,000 meters.
Zabuye Salt Lake
The harsh natural environment will naturally bring major challenges to the construction of factories, production lines and infrastructure, not to mention the problems brought by the introduction of excellent talents. But what's even worse is that the taste of the continental salt lake is really not comparable to the intelligence of South America and Argentina.
Among the salt lakes that have been mined in the mainland, the largest amount of lithium resources is the Qarhan Salt Lake in Golmud City, Qinghai Province, and I believe that everyone has seen someone travel here in the circle of friends. The amount of lithium resources here is about 10.49 million tons, ranking high in the country. But the problem is that the magnesium-to-lithium ratio of the lake is as high as 1577, and the lithium concentration is only 10-191 mg/L. In contrast, the magnesium-to-lithium ratio of Atacama Salt Lake in Chile, which is controlled by Tianqi Lithium, is only 6.4, the lithium concentration is 1835 mg/l, and the total resource is 48.97 million tons.
Therefore, although with the advancement of technology, including membrane technology - that is, the use of electrical permeation membrane, nanofiltration membrane method, the production of lithium extraction in continental salt lakes has been rising. However, the poor brine raw material still leads to too many impurities, and the quality of lithium carbonate is extremely unstable. This will affect the performance of lithium batteries and the efficiency of battery companies.
Of course, the mainland is not without high-quality salt lakes. The Zabuye Salt Lake, mined by Tibet Mining, has a lithium concentration of 1120 mg/L and a magnesium-to-lithium ratio of only 0.01, ranking first in the world. Although its 1.84 million tons of lithium resources are not high compared to the previous two lakes, other data are really beautiful. The only problem is that zabuye Salt Lake is located in Zhongba County, Shigatse City, Tibet Autonomous Region, and is nearly 900 kilometers away from shigatse city, and it takes more than 1,200 kilometers to Lhasa, which is farther than Beijing to Shanghai. It should be known that the Qinghai-Tibet Railway went as far west as it could, and only opened to The city of Shigatse.
For these reasons, in the past, the resources of lithium mining in the mainland were not high. However, with the increasing complexity of the international situation and the sharp fluctuations in the price of lithium carbonate, the entire industrial chain has to start making a fuss about domestic resources. After all, the ever-changing geopolitical factors don't give everyone much of a chance.
The overseas lithium ore supply chain is not stable
In view of the low taste of domestic lithium ore, the upstream related enterprises of lithium batteries in the mainland have long begun overseas layout. According to the 2021 U.S. Geological Survey (USGS) report, the total proven lithium resources in the world are about 86 million metal tons, of which 58% are concentrated in Bolivia, Argentina and Chile. As a result, the overseas layout of Chinese companies is also around South America on the other side of the world.
As early as 2018, Tianqi Lithium took out 4.1 billion US dollars, becoming the second largest shareholder of SQM, the largest lithium resource provider in intelligence. Before and after that, Ganfeng Lithium also cooperated with the Cauchari-Olaroz Salt Lake Project in Argentina. It is expected that after the commissioning of this year, the project's lithium carbonate production capacity will reach 40,000 tons. In 2019, Ganfeng Lithium invested another $387 million to acquire the London-listed Bacanora Lithium company, which will allow the former to obtain the right to mine a mine in Mexico. In 2020, CATL acquired a stake in Neo Liquitium Corp in order to acquire the company's Tres Quebradas lithium mine in the arrested Catamarca province in Argentina.
According to the incomplete statistics of the reporter of the Financial Associated Press, there are 16 mergers and acquisitions of lithium resources of Chinese enterprises with a transaction amount of more than 100 million yuan in 2021 (excluding recycling), of which 10 are overseas mergers and acquisitions.
The latest news is that in the announcement disclosed by Zangge Mining on February 9 this year, it signed an exclusive strategic cooperation agreement with Super Resources Co., Ltd. to invest in the Laguna Verde Salt Lake Lithium Project in Argentina, where Super Resources holds 100% of the shares.
If the layout of Chinese enterprises in the three South American countries is still oriented to the future production capacity enclosure, the cooperation between China and Australia in lithium ore is a long-term relationship. According to data released by the General Administration of Customs on April 21, the import volume of lithium concentrate in the mainland in the first quarter of 2022 was 529,000 tons, of which 502,000 tons came from Australia, accounting for about 95%. You know, Australia also exports "only" 2 million tons of lithium ore every year.
Thaleson Greenbush spodumene mine in Australia
At present, Tianqi Lithium has become a shareholder in Greenbushes, the world's largest hard salt lithium mine, and has built two phases of a lithium hydroxide production line with a total annual capacity of 48,000 tons in the city of Quinana, near Perth, the capital of Western Australia.
But the problem is that the complex geopolitical situation is adding uncertainty to China's overseas lithium resource supply chain.
At present, the competition between enterprises in various countries around the lithium resources of salt lakes in South America is also becoming increasingly fierce. In July 2021, Ganfeng Lithium proposed to acquire Canadian lithium company Millennial for C$353 million, which owns the development rights to two salt lake projects in Argentina. Two months later, CATL had agreed to "cut off" the acquisition for C$376.8 million. But in less than two months, the American lithium industry gave a higher acquisition price, triggering the "better offer" clause for the second time, and the offer rose by nearly 22.1% compared with the Ningde era.
More importantly, at the beginning of this year, it was revealed that Argentina, Chile and Bolivia and Mexico will form an organization similar to the "Association of Lithium Producing Countries", which functions similarly to OPEC and aims to dynamically adjust lithium ore production in order to affect international lithium ore prices. Although the possibility of the establishment of the organization is still on paper, if lithium ore will also become a market that is concerned by speculators in the international futures market, like oil, then it will be a major disadvantage to the development of the global, especially China's new energy automobile industry.
After all, as Li Xiang, the founder of Ideal Auto, said before, if lithium carbonate will also become a market for futures speculators like oil, then it must be paid attention to by the state and enterprises from the perspective of energy strategy.
However, whether it is the formulation of industrial policies or the commissioning of mines, everything takes time to prepare. However, the continued high price of lithium carbonate has put the future of the majority of new energy automobile companies into a precarious situation.
The story of domestic electric vehicles can't be told anymore
According to the report of Soochow Securities, the amount of lithium carbonate in the power battery is about 700 tons of lithium carbonate per GWh, which means that an electric vehicle with a battery capacity of 100KWh has a lithium carbonate content of about 70 kg, and the cost of this alone is as high as 46500 yuan. Of course, the lithium content in lithium iron phosphate and ternary lithium batteries is slightly different, and the former is lower. Two years ago, the price of lithium carbonate was less than 10% of today.
This poses a problem. Most of the current electric vehicle companies were established or established 3 years ago. New front-line car-making forces such as Wei Xiaoli were established earlier than 2016. Until 2020, the price of lithium carbonate has remained at a low level of around 40,000 yuan for most of the time, when the bicycle costing model of these companies also revolves around this price, even the current world's richest man, Musk. The most well-known application of his "First Principles" is to conclude that the price of automotive power batteries can drop to "only $80" per KWh by simply adding the prices of nickel, cobalt, manganese and lithium ore. It was on the basis of this conclusion that he created Tesla Motors.
In fact, with the improvement of process, manufacturing and assembly technology, the cost of power batteries has been a downward trend for a long time. The long-term revenue curve and profit expectations of enterprises such as Weilai, Ideal, Xiaopeng, Extreme Krypton, and Zhiji are also based on these considerations. In the case of NIO, the company's prospectus filed for listing in Hong Kong in March this year cited Frost & Sullivan's report. As the chart below shows, the agency expects battery prices to be about 33 percent in 2016 by 2025.
However, with the protection of the price of lithium carbonate, the price curve is likely to need to be significantly adjusted, followed by an increase in the price of the whole vehicle. However, with the help of a business model such as battery rental scheme Baas, NIO can work with its partner CATL to reduce the price increase brought about by the rising cost of batteries to a certain extent. Moreover, Weilai is mainly attacking the model market of more than 300,000 yuan, and users are more receptive to price increases. However, for enterprises that focus on 100,000-200,000 yuan models such as Zero Run, even if the price of the car rises by 5,000 yuan, it will have a great impact on its sales.
For China's new energy automobile industry, in addition to the upstream supply chain, it is also necessary to think about how to live down. After all, the suspension of production and the decline in consumer confidence brought about by the epidemic prevention and control are only short- and medium-term factors affecting the development of enterprises. If the price of lithium carbonate remains so high in the next few years or even 10 years, how to calculate the company's profit cycle is a problem that needs to be solved in front of every enterprise.
After all, the story has to go on, The show must go on.