1、 Review of lithium carbonate price trend in 2022
According to the data monitoring of the business community, the overall price of lithium carbonate in 2022 will still show a sharp upward trend. As of December 31, the average domestic mixed price of industrial lithium carbonate was 504000 yuan/ton, 89.47% higher than the average price of 266000 yuan/ton on January 1. On December 31, the average domestic mixed price of battery grade lithium carbonate was 52500 yuan/ton, an increase of 86.17% compared with the average price of 282000 yuan/ton on January 1.
From the price curve of lithium carbonate, the market of lithium carbonate will rise sharply and fall slightly in 2022, and the final price will remain at a high level. In the first half of the year, there was a slight decrease after the big rise, and then the price went up again. The rising trend continued in the second half of the year. In November, the price reached the highest point of the year. On November 13, the average mixed price of industrial grade lithium carbonate was 591000 yuan/ton, and the average mixed price of battery grade lithium carbonate was 609000 yuan/ton. After the high point, the price fell again, and it was in a downward trend until the end of the year.
According to the monthly K column chart of lithium carbonate, lithium carbonate will rise more than fall in 2022, and fall in April, May and December, with the largest decline of 11.73% in December. Other months showed different increases, with the largest increase of 33.31% in January.
2、 Analysis of Factors Affecting the Price Trend of Lithium Carbonate in 2022
From the perspective of the annual price trend of lithium carbonate in 2022, there are two small peaks of rise and fall and three periods of slow rise:
Rise and fall range of the first stage (January May): market supply and demand affect the price trend
In 2022, the price of lithium carbonate will continue the rising trend at the end of 2021. Until April 11, the price of industrial lithium carbonate and battery grade lithium carbonate will increase by 80.98% and 79.29%. In January and February, major domestic plants stopped production for maintenance and natural gas was limited in Qinghai, resulting in low supply. At the same time, due to regional seasonal factors in Qinghai from January to March, it was more difficult to produce frozen raw materials, and the output rate of lithium extraction from salt lakes decreased. After the end of the Spring Festival holiday, the upstream and downstream markets were in the state of resuming production and work, which greatly increased the market demand. In March, the factory maintenance gradually returned to normal. With the replacement of some manufacturers’ equipment and the ramp up of new capacity, the overall output increased significantly. Although the purchase demand slowed down slightly, it did not affect the rising momentum. Therefore, the price of lithium carbonate continued to soar all the way up to the first ten days of April.
Since the middle and late April, the price of lithium carbonate has stopped rising and retreated. Until May 24, the prices of industrial lithium carbonate and battery grade lithium carbonate fell by 6.94% and 7.63% respectively. The operating rate of mineral aggregate enterprises has gradually recovered, the temperature in Qinghai has risen, and the output has increased. Subsequently, the increase of new capacity in the market has continued, and the supply has continued to rise. The downstream ternary end is affected by the fluctuation of nickel price, and the orders for cathode materials and lithium iron are affected. The overall market demand for material end procurement is relatively light. The continuous domestic epidemic has impacted the entire new energy industry chain, and the auto enterprises’ factories have stopped production, leading to the contraction of orders of battery enterprises and the continuous reduction of lithium salt demand transmitted to the upstream.
The second stage is a gradual rise range (from June to mid August): the supply is stable, and the demand drives the market to improve
In June, along with the salt lake system in Qinghai Province, the annual output peak was maintained, and the new production increase line was superimposed, so the overall output continued to grow. The epidemic situation has gradually improved, the downstream terminal demand has warmed up, and the production scheduling of enterprises has rebounded. Under the condition of relatively stable supply and demand, the price of lithium carbonate is relatively strong. However, with the recovery of downstream terminals slowing down, auto enterprises and large factories have stopped production. The demand growth of lithium iron is not as expected, and the price has gradually stabilized. The price remained stable until the middle of July. The downstream market demand began to recover in late July. The production and sales of new energy vehicles increased on a month on month basis. The terminal demand was transmitted to the demand of material plants. The market purchase intention was strengthened from late July to mid August, and the price of lithium carbonate returned to the upside.
The third stage rise and fall range (late August December): the terminal benefits are transmitted upward, and the lithium carbonate price has reached a new historical high
The price of lithium carbonate accelerated in late August, and the price of industrial lithium carbonate and battery grade lithium carbonate increased by 27.37% and 26.45% until November 13. The impact of the limited power policy in Sichuan in summer has led to a decrease in the overall output of lithium salt enterprises. The supply of goods in the spot market is tight, and the manufacturers are short of raw materials. The output of lithium carbonate is less than expected. Superimposed by the frequent domestic epidemics, Qinghai Golmud and other regions are affected by the epidemic prevention and control, and the shipment is difficult and slow, leading to a more tight spot of lithium carbonate, and this wave of tight supply situation has lasted until early November.
In terms of demand, under the atmosphere of “golden nine and silver ten”, the production and sales of terminal new energy vehicles increased significantly, which led to the rise of four major material orders in the downstream market. The market procurement volume continued to increase and was oriented to trade. The trading party was reluctant to sell the goods at a low price, and the market entered a stage where one product was hard to find. Superimposed new energy subsidies have completely declined, some auto enterprises have entered the state of stock in advance, and the demand for energy batteries has increased. Therefore, lithium battery manufacturers’ demand for raw materials has also increased significantly, and lithium carbonate prices have kept breaking new historical highs.
In the middle and late November, the price of lithium carbonate stopped rising and fell again. Until December 31, the price of industrial grade lithium carbonate and battery grade lithium carbonate fell 14.72% and 13.79% respectively. As the products of major lithium carbonate manufacturers are basically in the state of long-term delivery, the spot market has gradually changed from tight to slightly loose. Subsequently, the market heard that the battery plant planned to reduce production, which would reduce the purchase of lithium salt. The lithium carbonate market was pessimistic. In the early stage, the market supply gap was timely supplemented by the large volume of lithium carbonate imported from South America. While the downstream terminal market rush to install has come to an end, the demand of the power end market has weakened and the heat has gradually decreased. The output of downstream cathode material plants and lithium iron enterprises has declined, which has also driven the overall demand for lithium carbonate to weaken. The market procurement is in a state of rigid demand, and the mood is still mainly wait-and-see.
3、 Output, import and export, consumption data of lithium carbonate in 2022 and supply and demand of upstream and downstream markets
Output, import and export, consumption data
From January to February, the domestic mainstream lithium salt plants in Sichuan and Jiangxi stopped production for maintenance. During the Spring Festival holiday, the operating rate was insufficient and the output was at the lowest level from the whole year. Subsequently, the output continued to rise. Until August, due to the peak power consumption in summer, the limited power policy in Sichuan, one of the main sources of lithium salt capacity supply, led to another decline in output. After the end of the power rationing policy, lithium carbonate production continued to rise. The cumulative output of lithium carbonate in China from January to November 2022 is about 314400 tons, and the monthly output from January is higher than that in 2021.
According to customs statistics, the cumulative import volume of lithium carbonate in China from January to November 2022 is 125200 tons, an increase of 69.7% year on year. From January to November, China’s cumulative export of lithium carbonate was 9532.85 tons.
From January to November 2022, China’s apparent consumption of lithium carbonate is about 429516 tons, with an import dependency of 28%. In 2021, China’s dependence on lithium carbonate import will be 25.9%. Although the consumption of lithium carbonate in 2022 will increase by nearly 50% compared with that of last year, the import proportion will not change much, and domestic lithium carbonate has indeed contributed a lot to the improvement of production capacity.
The upstream lithium resource demand is still tight, and the lithium price continues to rise
The upstream of the lithium carbonate industry chain is the collection of raw materials, which are mainly divided into lithium mines and salt lakes to produce industrial grade lithium carbonate. China has few recoverable lithium mineral resources, accounting for 6.69% of the world’s total. Although the output of lithium ore in China will increase to 14000 tons in 2021, up 5.26% year on year, the demand for imported lithium ore is still large. Compared with 2021, the total imports of spodumene concentrate in 2022 will increase, but the supply of lithium salt to domestic production is still tight.
The price of lithium ore will also keep rising in 2022. The most striking thing about upstream raw materials is the auction of Pilbara spodumene concentrate, which is known as the “lithium price vane”. From the first auction on July 30, 2021 to the latest auction on December 14, 2022, the auction price of spodumene concentrate is rising rapidly. Although the auction price has been lowered twice, the price is still at a high level.
The demand of downstream and terminal industries continues to rise
The price of lithium hydroxide in the downstream market rose sharply. According to the data monitoring of the business community, the price as of December 31 was 553333.31 yuan/ton, up 155.38% for the whole year. Lithium hydroxide actively followed the rise of raw materials, with good performance in overlapping supply and demand, and the price market showed a sharp rise. In addition, the export order is good, the spot supply is short, and the focus of market negotiation is constantly moving up.
The price of downstream lithium iron phosphate rose at a constant rate throughout the year. According to the data monitoring of the business community, the price was 166000 yuan/ton as of December 31, an overall increase of 58.1% throughout the year, reaching 60000 yuan/ton. The market of lithium iron phosphate in China is highly competitive, and both the supply and demand sides maintain rapid growth. In the first half of 2022, the domestic shipment of lithium iron phosphate materials has reached 417000 tons, with a year-on-year growth of 142%, basically reaching the level of last year. The average monthly shipment in the third quarter exceeded 100000 tons, and the domestic shipment of lithium iron phosphate materials had exceeded 700000 tons as of September. From the perspective of shipment, lithium iron phosphate materials continued to maintain a high growth rate throughout the year.
According to data statistics, the new energy in China’s lithium carbonate downstream industry market accounts for 49%, mainly for lithium batteries of new energy vehicles; Battery consumption accounted for 25%, including lithium batteries for various electrical appliances; The third proportion of traditional industries is 17%; Energy storage accounts for 6%; Export accounts for 3%.
With the vigorous development of China’s new energy vehicle industry, China has become the center of the global new energy industry, and China’s new energy vehicle market has maintained rapid growth. From January to November 2022, the production and sales of new energy vehicles in China will reach 6.253 million and 6.067 million respectively, doubling year on year, with a market share of 25%, which also brings huge demand for lithium batteries. Driven by the high demand for downstream materials and the terminal market, the price of lithium carbonate remained high throughout the year.
4、 Future market forecast of lithium carbonate
Lithium carbonate analysts from the business community believed that: at the end of this year, the price of lithium carbonate showed a weak trend of decline. Due to the impact of declining subsidies and weakening terminal demand, battery factories continued to reduce production and go to storage, which continued to push down the demand for materials, leading to the continuous decline in the price of lithium carbonate. At present, some lithium salt plants mainly focus on long order delivery, and do not rush to ship because of the completion of annual sales tasks. However, a few salt factories expected the price to decline, which accelerated the downward speed of the price in the zero order market. The cathode material factory has sufficient inventory, and the procurement demand is low in the short term. Most of them are replenished by a small number of orders. In addition, traders sold goods actively, which also accelerated the decline of zero order prices. From the current situation, the lithium carbonate price has no positive performance before the Spring Festival holiday, and it is expected that the lithium carbonate price will resume its upward trend after the 2023 Spring Festival holiday.