The price of lithium carbonate has reached a new high! Lithium resource listed companies become "gold absorbing kings"

The price of lithium carbonate has hit record highs

In the past few days, the domestic lithium carbonate market has risen rapidly, and the price has repeatedly reached new highs
.
Since October 26, the average price of battery-grade lithium carbonate has continued to rise after breaking through the record high of 550,000 yuan (ton price, the same below
).
According to Shanghai Steel Union, on November 2, the average price of domestic battery-grade lithium carbonate rose to 567,500 yuan
.
The average price of industrial-grade lithium carbonate also rose from 539,000 yuan on October 26 to 554,000 yuan on November 2, hitting a record high
.
At the end of 2021, the highest price in the domestic lithium carbonate market was only 270,000 yuan
.

East Asia Qianhai Securities believes that lithium concentrate quotations at home and abroad have risen sharply recently, and the cost of lithium carbonate is strongly
supported.
In addition, the supply of lithium carbonate is decreasing, and the terminal new energy vehicles are in the peak sales season, and the demand from downstream manufacturers is not reduced
.
Under the mismatch between supply and demand, the price of lithium carbonate continues to rise
.

From the perspective of raw materials, lithium concentrate quotations at home and abroad have risen
sharply recently.
On October 28, Platts assessed lithium concentrate at $7,700 (FOB Australia), up $600 from the previous week
.
Baichuan Yingfu data shows that on October 27, the spot price of lithium concentrate was $6,600, up $50 from last week
.

At present, China has a high
dependence on upstream lithium resources.
From the perspective of overseas lithium resource enterprises, the commissioning of Allkem's new second phase project has been postponed again, and the output of MIN mines in the third quarter has fallen
sharply from the previous quarter.
Overseas mines in production are expected to have more than expected increases, and the supply and demand of the lithium concentrate market will remain tight
.
In addition, on October 24, Australian lithium supplier PLS issued an announcement that it had completed the sale of a new batch of 5,000 tons of lithium concentrate at a transaction price of $7,255, up $155 from October 18
.
This gives a certain guiding effect
on the long-term co-price of lithium concentrate in the future market.

The progress of domestic lithium resource development is also not as expected, lithium concentrate is still continuing to be destocked, and the overall supply is tight
.
On the whole, it is expected that the price of lithium concentrate will remain rising in the later stage
.

From the downstream point of view, since the beginning of this year, the production and sales of new energy vehicles have been booming, and the output of power batteries has also grown
rapidly.
According to statistics from Fubao Lithium Power Grid, the production and sales of new energy vehicles in China in January ~ September reached 4.
717 million units and 4.
567 million units, respectively, a year-on-year increase of 120% and 110%.

In September, China's power battery output was 59.
14GWh, a year-on-year increase of 155%; In January ~ September, China's power battery output accumulated 362.
9GWh, a year-on-year increase of 169%.

In October, the sales situation of new energy vehicles in China was generally gratifying, and many new energy vehicle companies delivered more than 10,000 units
.
The year-end impulse of new energy vehicles is expected to increase
production and sales from the previous month.
Terminal demand continues to improve, which will bring support
to the power battery and lithium carbonate markets.

From the perspective of supply, with the end of power cuts in Sichuan, lithium salt manufacturers have resumed production from around August 30, and this round of power cuts is expected to affect lithium carbonate production in Sichuan by about 3,240 tons
.
In addition, due to the impact of the epidemic in Qinghai, the shipment progress has slowed down, resulting in a reduction
in the circulation resources of the lithium carbonate market.

"Entering the fourth quarter, Qinghai, Tibet and other places are affected by the weather, lithium carbonate production may decline, coupled with the maintenance plans of some enterprises at the end of the year, the uncertainty on the supply side will increase
.
" Qu Yinfei, an analyst of the lithium battery industry of Longzhong Information, analyzed
.

In terms of foreign supply, the world's main lithium carbonate exporters are Australia, Chile, Argentina and Bolivia
.
Not long ago, three South American countries - Chile, Argentina and Bolivia - announced their intention to create a "lithium OPEC" to enhance their dominance in the supply and pricing of global lithium resources
.
If the "lithium triangle" agreement is reached, the release of the incremental global lithium carbonate supply will be further slowed down
.

For the future market, West China Securities analyst Yan Rong analyzed that the domestic salt lake has begun to reduce production due to the cold weather, while downstream manufacturers have rushed to the end of the year, and the demand for stocking continues to increase
.
It is expected that the contradiction between supply and demand of lithium carbonate will become more prominent, and the price will continue to rise
in the fourth quarter of 2022 and the first quarter of 2023.

Dongguan Securities and Minsheng Securities also believe that spot supply is in short supply, and the downstream consumption is not changing, and lithium prices are expected to continue to rise
.
They are all optimistic about the stability
of the lithium sector development in the fourth quarter.

Lithium resource listed companies become "gold absorbing kings"

As of October 30, the three quarterly reports of the 18 listed companies included in the Wind lithium mine sector have all been released
.
Under the background of lithium carbonate prices constantly breaking through historical highs, the prosperity of the entire industry has improved, and the performance of lithium resource listed companies has soared, becoming a veritable "gold absorbing king"
in the industrial chain.

According to statistics, the 18 listed companies in the Wind lithium mining sector achieved a total net profit of 77.
378 billion yuan in the first three quarters, an increase of more than 4 times
over the same period in 2021.
Among them, there are 16 companies with year-on-year increase in net profit in the first three quarters, and only 2 companies that have declined
, Jinyuan and Tibet Everest.

From the perspective of profit distribution, the net profits of the three companies of Tianqi Lithium, Ganfeng Lithium and Salt Lake Co.
, Ltd.
in the first three quarters all exceeded 10 billion yuan, 15.
981 billion yuan, 14.
795 billion yuan and 12.
082 billion yuan respectively, with a total profit of 42.
858 billion yuan, accounting for about 55.
4% of the entire industry, ranking in the first echelon
of the industry 。 Due to the advantages of production capacity, self-owned mines or ultra-low cost, the net profits of Tianhua Super Clean, Shengxin Lithium Energy, Yongxing Materials and Zangge Mining exceeded 4 billion yuan in the first three quarters, with 5.
154 billion yuan, 4.
35 billion yuan, 4.
271 billion yuan and 4.
166 billion yuan respectively, ranking in the second echelon
of the industry.

From the perspective of year-on-year growth, Rongjie and Tianqi Lithium benefited from the low base and their own mine-end resource advantages, and their net profits in the first three quarters increased by 45.
33 times and 29.
16 times year-on-year, respectively, ranking the top two
.
In addition, the net profits of China Mineral Resources, Jiangte Motor, Shengxin Lithium Energy, Yongxing Materials and Tianhua Super Net in the first three quarters all increased by more than 5 times
year-on-year.

However, in the third quarter, affected by factors such as rising costs and power cuts in some regions, the performance of various companies diverged
from the previous quarter.

According to the reporter, in the second quarter of this year, among the 18 listed companies, only the net profit of China Mining Resources and Sichuan Energy Power fell
month-on-month.
By the third quarter, the number of companies with sequential net profit declines
reached nine.
However, the decline of companies with concentrated business and strong operational stability is relatively limited, such as Jiangte Motor, Tianhua Super Clean and Tianqi Lithium and other 5 companies whose net profits have not decreased by more than 20%
month-on-month.
Salt Lake shares fell by 48% month-on-month, mainly due to the sharp decline in potash sales, while its lithium salt production and sales and prices still maintained a month-on-month increase
.

Since the beginning of this year, the only listed companies that have maintained a quarter-by-quarter increase in net profit are Jinyuan Shares, Rongjie Shares, Ganfeng Lithium Industry, Yongxing Materials, China Mineral Resources, Keda Manufacturing, Zangge Mining, Tibet Urban Investment and Yahua Group
.

Many industry insiders believe that the contradiction between lithium salt supply and demand is difficult to alleviate in the short term, lithium prices will remain high, and companies with high resource self-sufficiency rates and obvious volume increase are expected to continue to benefit
.