1、 Review of Lithium carbonate price trend in the first half of 2023
According to the monitoring of the commodity market analysis system of the business community, in the first half of 2023, the price of Lithium carbonate had a roller coaster decline and rebound, but the overall price was still downward compared with the beginning of the year. As of June 30, the domestic mixed average price of industrial Lithium carbonate was 298000 yuan/ton, a decrease of 40.87% compared with the average price of 504000 yuan/ton on January 1. The domestic mixed average price of battery grade Lithium carbonate was 312400 yuan/ton on June 30, a decrease of 40.5% compared with the average price of 525000 yuan/ton on January 1.
From the price curve chart of Lithium carbonate, the price of Lithium carbonate has been falling since the beginning of 2023, and the price will reach a low point in the middle and late April. As of April 24, the average mixed price of industrial Lithium carbonate is 165000 yuan/ton, and the average mixed price of battery grade Lithium carbonate is 194000 yuan/ton, with a decline of 67.26% and 63.05% respectively. After the low point, the price rebounded and continued to rise. The most significant price increase was in May, while there was a slow increase in June, and the final price remained around 300000 yuan/ton.
According to the monthly K column chart of Lithium carbonate, in the first half of 2023, the price of Lithium carbonate will rise in May and June, with the maximum increase of 66.67% in May, while other months will fall in different ranges, with the maximum decrease of 41.3% in March.
2、 Analysis of Lithium carbonate price trend factors in the first half of 2023
In the first quarter, the price of Lithium carbonate kept falling: industrial Lithium carbonate fell 55.44%, and battery Lithium carbonate fell 50.67%
In January, the Lithium carbonate reserve stock of the lithium salt plant was sufficient, and some large plants kept reducing the transaction price of Lithium carbonate due to obvious inventory pressure. And traders also have ample supply of goods, mostly in a state of low price shipping. In terms of demand, due to the impact of the Spring Festival holiday, the market demand is relatively poor, and downstream enterprises are entering a state of vacation. This has led to a serious reduction in market orders, with no procurement demand at the moment. The market expects prices to continue to decline, leading to a heavy sense of pessimism.
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In February, the decline of Lithium carbonate continued to expand, and the lithium salt plant was in the state of resuming production. However, the mica smelting enterprises affected by environmental events in the early stage resumed production, and the new capacity climbed significantly. With the continuous warming of the temperature, the output of the salt lake is also increasing, so the increase of the total output leads to an increase in the supply of Lithium carbonate, which suppresses the price of Lithium carbonate. However, downstream battery material enterprises have been slow to destock and their production plans have been lowered, resulting in a sharp decrease in demand for Lithium carbonate. In the uncertain cycle of demand recovery, the upstream and downstream continue to negotiate and sign long orders, resulting in the market being in a wait-and-see state without purchasing intention.
In March, the lithium salt plant entered the passive accumulation stage. Although some enterprises arranged production reduction and maintenance, the output of Lithium carbonate still increased, and the inventory remained at a high level. Most lithium salt plants mainly sign long orders, and the price of Lithium carbonate keeps falling. In the atmosphere of buying up instead of buying down, market inquiries are relatively light. In addition, downstream market demand remains weak, making it difficult for the market supply and demand relationship to support spot prices. In the first quarter, the pressure on lithium salt factories to ship increased, leading to low price selling in the market and accelerating the decline in spot prices. As the price decline of Lithium carbonate continues to expand, the actual transaction is not optimistic.
In the second quarter, the price of Lithium carbonate stopped falling and rebounded, and the upstream and downstream of the industrial chain maintained a clear game
In April, the price of Lithium carbonate remained on the decline until the late ten days when some mica enterprises and lithium salt plants had a large number of OEM and production reduction and suspension due to cost inversion and other problems. The operating rate of Lithium carbonate dropped, the spot supply in the market was tight, and the price of Lithium carbonate began to rebound. On the demand side, downstream battery enterprises all have sufficient reserves of Lithium carbonate, so procurement reduction and delayed delivery often occur, and gradually transmit to the upstream of the industrial chain. The increase in reserves makes the actual demand for Lithium carbonate lagging behind. Near the end of the month, the Lithium carbonate market became more active, the number of downstream inquiries increased, and the spot market was less, and the sellers were reluctant to sell, which made the market more tight, leading to increased demand for Lithium carbonate and a rebound in price.
In May, the supply of upstream raw material lepidolite was limited, and the price of imported Spodumene concentrate from overseas was high and increased significantly, which increased the production cost of Lithium carbonate. In addition, traders’ hoarding sentiment is still fierce, and the price of Lithium carbonate is rising. Affected by both supply and demand, the upstream and downstream of Lithium carbonate continue to play games. The early rise was mostly guided by market sentiment, and the downstream demand for replenishment was strong. As the downstream demand did not improve significantly, the price of raw materials was high. Although the bullish sentiment in the Spot market was still strong, lithium salt manufacturers maintained high prices, but further price increases will further increase the cost of downstream manufacturers, and the upward momentum will gradually weaken.
In June, the price of Lithium carbonate increased slowly and gradually stabilized, and the price dropped slightly near the end of the month. The market activity gradually stabilized, the downstream early replenishment was sufficient, and the Lithium carbonate price transmission was under pressure, so it was still difficult to reach a deal at a high price, so the supply and demand game was still obvious.
3、 Lithium carbonate production, import and export data and market supply and demand in the first half of 2023
According to industry data statistics, the domestic production of Lithium carbonate from January to June 2023 is 199150 tons, with a cumulative year-on-year growth of 31.6%. By the end of May, China has put into production more than 700000 tons of Lithium carbonate per year. At the same time, many large Lithium carbonate projects using domestic brine (Tibet), lithium ore (Xinjiang), lithium mica (Jiangxi, Hunan) and other raw materials are also under construction. It is believed that the self-sufficiency rate of Lithium carbonate in China will gradually increase in the future, which will better provide resources for the development of China’s lithium battery industry.
According to customs statistics, the cumulative import volume of Lithium carbonate in China from January to May 2023 is 60157 tons, an increase of 40% year on year. The average import price in May also decreased from 379000 yuan/ton in April to 273000 yuan/ton. From January to May 2023, China’s cumulative export volume of Lithium carbonate is 5487.1 tons.
From January to May 2023, China’s apparent consumption of Lithium carbonate is about 170890 tons, and the import dependence is 25.6%. In terms of Lithium carbonate consumption, affected by factors such as the increase in the output of terminal new energy vehicles and the substantial increase in the output of Lithium iron phosphate and ternary cathode materials month on month, the apparent consumption of Lithium carbonate in May reached 42000 tons, an increase of 11.8% month on month. In May, the domestic production of Lithium carbonate reached 33000 tons, and the import dependence of Lithium carbonate dropped to 20.6%, the lowest level in the year.
Upstream lithium ore resources are tight, and lithium ore prices are relatively high
The upstream of the Lithium carbonate industrial chain is the collection of raw materials, which are mainly divided into lithium mines and salt lakes, and made into industrial Lithium carbonate. According to data, global lithium resources are mainly distributed in countries such as Chile, Australia, and Argentina, with China’s reserves accounting for only 6.3% of the global total. There is a significant gap in lithium self-sufficiency. Since the beginning of this year, mining policies of overseas countries have been continuously tightening, and their management of lithium resources is strengthening. The import volume of lithium ore in China from January to May 2023 was 1.677 million tons, an increase of 74.3% year-on-year.
Downstream and terminal industry trends
In the first half of the year, the market of Lithium hydroxide in the lower reaches first fell and then rose, and the overall trend was sluggish. As of June 30th, the average price was 332500 yuan/ton, with a decline of 39.91% in the market within six months. The market support for Lithium hydroxide was weakened due to the drop in the price of Lithium carbonate. In addition, the domestic demand was weak, the actual market transactions were limited, and the focus of Lithium hydroxide negotiations was weak. In the second quarter, due to the strong rebound of Lithium carbonate price, the strong support of Lithium hydroxide market, and the slight increase of downstream demand, the price mentality of the industry increased.
The downstream Lithium iron phosphate showed a downward trend in the first half of the year. As of June 30, the price was 95000 yuan/ton, and the market fell 42.77% in the first half of the year. In the first quarter of Lithium iron phosphate, due to the double decline of upstream raw materials Lithium carbonate and Iron(III) phosphate, the cost of lithium iron continued to decline. On the other hand, the Lithium iron phosphate market has less new orders and greater shipping pressure. In addition, the terminal market is weak, and the market recovery expectation is lengthened. Subsequently, the price of Lithium carbonate returned to a high level, which played a certain role in supporting the cost of Lithium iron phosphate. In addition, the production schedule of major positive electrode material manufacturers is expected to continue to increase, and market prices and construction continue to improve.
The terminal new energy vehicle industry maintained an overall growth trend in the first half of the year. According to data from the Automobile Industry Association, from January to June 2023, China’s total production and sales of new energy vehicles reached 3.788 million and 3.747 million, with year-on-year growth of 42.4% and 44.1%, respectively. Therefore, terminal demand for lithium batteries still exists, which also plays a supporting role in the price of Lithium carbonate.
4、 Future market forecast of Lithium carbonate
Analysts from Lithium carbonate business agency believe that the price of Lithium carbonate will fluctuate in the first half of 2023 due to the imbalance between supply and demand in the industrial chain. With the gradual improvement of domestic Lithium carbonate production and quality, it may reduce dependence on foreign Lithium carbonate imports, which will help maintain the stability of Lithium carbonate prices. In addition, the rapid development of new energy industry will also drive the demand for Lithium carbonate. At present, the supply of Lithium carbonate market is relatively sufficient. In contrast, the demand remains stable, and the game between market supply and demand continues. It is expected that the downstream market will mainly wait and see in the short term, and the price of Lithium carbonate may fluctuate in a narrow range.
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