According to the Commodity Market Analysis System of Shengyi Society, the price of lithium carbonate has returned to a volatile trend after experiencing a surge in production stoppage at the mining end of Ningde Times. As of August 19th, the benchmark price of battery grade lithium carbonate at Shengyi Society was 82733 yuan/ton, an increase of 16% from the beginning of the month, a month on month increase of 28.27%, and a year-on-year decrease of 3.57%; The benchmark price of industrial grade lithium carbonate trading company is 81166 yuan/ton, an increase of 15.46% from the beginning of the month, a month on month increase of 28.5%, and a year-on-year decrease of 2.21%.
Supply side disturbance leads to a significant increase in lithium carbonate prices
Last week, due to the news of the complete suspension of production in the Jiangxi Jianxiawo mining area caused by the expiration of the mining license of Ningde Times, there were concerns about tightening market supply, resulting in a significant increase in lithium carbonate prices. During the week, global lithium giant Albemarle’s La Negra lithium processing plant in Antofagasta, Chile, temporarily shut down some production lines due to an acid containing pipeline explosion accident. Further stimulate price increases.
The fundamental pattern of oversupply has not changed
Maintaining a high level of production: With the continuous increase in domestic new production capacity and the improvement of capacity utilization rate of OEM enterprises, the price rebound may stimulate active production line shutdowns. The actual impact of Ningde’s shutdown on the supply side is not significant.
The inventory has been slightly reduced, but it is still at a high level: although there has been a trend of inventory reduction in China since July, as of mid August, the domestic lithium carbonate inventory is about 145000 tons. Still at a high level. From a global perspective, the reduction in mining production in Australia coupled with the decline in the stability of lithium mine supply in Africa has resulted in low global lithium mine inventories, leading to an increase in traders’ hoarding and reluctance to sell.
The demand growth trend has not changed, but the growth rate has slowed down: the production and sales of new energy vehicles have maintained a growth trend. In July, the production and sales of new energy vehicles reached 1.243 million and 1.262 million respectively, an increase of 26.3% and 27.4% year-on-year. But as the penetration rate of new energy enterprises increases to 48.7%, the demand for lithium carbonate in power batteries slows down. The demand for energy storage remains strong, with rigid demand for photovoltaic and wind power distribution and storage. Coupled with the promotion of policies in the European and American markets, the bidding capacity for domestic energy storage has surged by 88% year-on-year.
The data analyst of Shengyi Society believes that in the short term, lithium carbonate prices may experience severe fluctuations due to supply side news disturbances. However, in the long run, the fundamental supply-demand pattern has not changed, and there is no further upward momentum for lithium carbonate prices. Specific changes in market supply and demand still need to be monitored.