The auction price of lithium concentrate of Australian lithium mining giant Pilbara Mining Company (hereinafter referred to as "Pilbara") has reached a new high.
On October 18, local time, Pilbara announced on its official website that before its seventh and tenth spodumene concentrate auction held in the Battery Materials Exchange (BMX) of the year, it accepted an offer of $7,100 FOB/ton, up 1.6% from the previous round of auction of $6,988 / ton, another record high.
The rise in lithium ore prices reflects the short-term supply and demand contradiction of lithium resources, and has a strong positive correlation with downstream lithium salt prices. Shanghai Steel Union data show that the recent lithium carbonate trend continues to rise, October 19, battery grade lithium carbonate average price of 539,500 yuan/ton, also hit a record high. Huaxi Securities Research report believes that the possibility of battery-grade lithium carbonate prices rising to 600,000 yuan/ton this winter cannot be ruled out.
Strong market demand superimposed prices continue to be high, "home mine" lithium salt enterprise performance increased, "lithium industry duo" Tianqi Lithium, Ganfeng Lithium in the first three quarters of the net profit range of 15.2 billion to 16.9 billion yuan, 14.3 billion to 15.3 billion yuan, year-on-year growth of 27.7 times -30.9 times, 4.8 times -5.2 times. The industry is expected to maintain a tight balance between supply and demand in the next few years, and companies with high resource self-sufficiency and significant volume growth are expected to continue to benefit.
The announcement shows that the Pilbara lithium concentrate auction is scheduled to take place on October 18 local time, but the company accepted an offer of $7,100 / ton before the official auction, selling 5,000 tons of spodumene concentrate with a lithium content of 5.5%. At present, the two parties have signed a sales contract, and the buyer will pay a 10% deposit in the near future and submit an acceptable irrevocable credit certificate in late October.
After proportionally adjusting the lithium content and superimposing the freight, the quotation is equivalent to US $7830 / ton based on China CIF lithium concentrate with 6% content, and is expected to be shipped in mid-November. According to Longzhong Information estimates, the cost of this batch of ore to produce battery-grade lithium carbonate is about 540,000 yuan/ton, which is higher than the current market average price, and the output of lithium carbonate is expected to enter the market in February - March 2023.
Since 29 July 2021, Pilbara has been auctioning some of its dispersed mono lithium concentrate on the BMX electronic trading platform in addition to the long Order, which has been held ten times so far, and has gradually become the "bellwether of lithium prices". From the previous auction situation, in addition to the seventh auction price slightly lower, the price of Pilbara lithium concentrate has risen all the way, from the first 1250 US dollars/ton to the current 7100 US dollars/ton in more than a year, an increase of 4.68 times.
At present, the world's lithium resources mainly include Australia, South America, China and Africa, among which Australia is dominated by spodumene mines, accounting for more than 40% of global production in 2021. Driven by the strong market demand of the new energy industry, lithium concentrate has shown a rising state of volume and price.
In the second quarter of this year, the total production and sales of mines in Australia were 638,000 tons and 661,000 tons, respectively, an increase of 26.4% and 41.6% from the previous quarter. The long association price of lithium concentrate reached 5,000 US dollars/ton, which almost doubled from the previous quarter. Even so, the price of the above-mentioned long agreement compared with the price of the Pilbara auction still has a difference of about 2000 US dollars/ton, and the subsequent rise is still expected.
According to Northeast Securities research report, due to the shortage of labor in Australia due to the epidemic, the production of many mines such as Mt Marion and Mt Cattlin is below the guidance, and the Pilbara raw mine mining is also less than expected. In the next two to three years, the seven main Australian mines can provide limited increments, and nearly 40% of the production capacity that was originally planned to be released during the second half of 2022 to 2024 will be postponed, and the supply shortage in the lithium resource industry will continue.
The price of lithium ore has risen, pushing up the high price of lithium carbonate and other lithium raw materials. According to Shanghai Steel Union data, since mid-August, battery grade lithium carbonate began to continue to attack and break through 500,000 yuan/ton mark, the recent average daily increase is more than 2000 yuan/ton, as of October 19, the average market price has reached 539,500 yuan/ton, a new high.
"Lithium ore and lithium carbonate prices have strong correlation, and this lithium ore auction will reach a new high, which will effectively support the price of lithium carbonate." Long information lithium battery industry analyst Qu Yinfei told the Securities Times ·e company reporter, entering the fourth quarter, Qinghai, Tibet and other places affected by the weather, lithium carbonate production or decline, superposition at the end of the year some enterprises or storage equipment maintenance, the supply side of the uncertain factors increase, and downstream manufacturers have at the end of the year to seize the volume, stock demand continues to increase, the short-term supply and demand contradiction highlights, Further promote the rise in lithium carbonate prices.
Huaxi Securities Research Report pointed out that the current point is in the industrial chain of the most demand for the year, the supply is expected to be tighter in the fourth quarter, do not rule out this winter battery grade lithium carbonate prices rose to 600,000 yuan/ton of possibility.
We have almost no inventory now." A relevant person of a lithium carbonate production company in Central China told the Securities Times ·e company reporter that the new production capacity of downstream manufacturers is accelerated, the demand side is rapidly expanded, and the supply side is unable to keep up, and customers are now asking for orders every day, or even a day.
Qu Yinfei said that the current lithium carbonate enterprise inventory level is generally low, Qinghai manufacturers in order to cope with the possible reduction in the fourth quarter, will retain a certain amount of alert inventory, Jiangxi, Sichuan and other manufacturers basically have no inventory, even if there are, most have been locked, but did not have time to ship.
The high prosperity of lithium carbonate can be seen in the performance of major lithium salt companies. According to the performance forecast, Tianqi Lithium is expected to earn 15.2 billion to 16.9 billion yuan in the first three quarters, an increase of 27.7 times to 30.9 times; Ganfeng's net profit in the first three quarters is expected to be 14.3 billion to 15.3 billion yuan, an increase of 4.8-5.2 times. Rongjie shares led the "pre-increase list" with a 43-47 times performance increase, and it is expected that the net profit of the first three quarters will be 1.2 billion to 1.3 billion yuan. In addition, Salt Lake Shares, China Mineral Resources, Tianhua Super clean, Zangge Mining, Yongxing Materials, Yahua Group, Xizang Mining and other lithium salt manufacturers have achieved several times of net profit growth.
The game of lithium battery industry chain is everywhere. Recently, downstream battery factories have gradually ensured supply and cost reduction through long association, joint ventures, layout mines and other ways, and accelerated the price adjustment mechanism negotiated with customers to transmit cost pressure, and achieved certain results. From the third quarter performance forecast, Ningde times, Guoxun High-tech, Yi Wei lithium energy and other battery factory profit levels have been improved, of which Ningde times is expected to achieve a net profit of 8.8 billion to 9.8 billion yuan in the third quarter, a new quarterly profit record, an increase of 169%-200%.
For the follow-up lithium resource supply and demand contradiction when can be alleviated, the market expectations are different. In Qu Yinfei's view, it is expected that the lithium mine supply side will be released in 2023, and the lithium price may have downward risks, but the new production capacity will be affected by the epidemic, labor force, environmental protection approval and other factors from the landing to the effective production capacity, and uncertainty remains. Fucan Technology has said in the reception of investors in the survey that the lithium carbonate supply and demand relationship next year still can not see signs of significant correction, but there may be two important changes, which will have a favorable impact on market sentiment, one is that mining companies in Australia and South America began to ship, and the other products gradually entered the market, such as sodium-ion batteries.
