According to the Commodity Market Analysis System of Shengyi Society, the price of lithium carbonate has skyrocketed since the 11th. As of August 12th, the benchmark price of domestic battery grade lithium carbonate in Shengyi Society was 75733 yuan/ton, an increase of 20.28% compared to the previous month and a decrease of 13.58% compared to the same period last year; The benchmark price for industrial grade lithium carbonate trading is 74166 yuan/ton, an increase of 19.95% compared to the previous month and a decrease of 12.75% compared to the same period last year.
Ningwang Mining Area suspends production, lithium carbonate futures hit the daily limit up
On July 7th, the Natural Resources Bureau of Yichun City issued a notice requiring 8 lithium mining enterprises to complete the preparation of verification reports on changes in mineral types and reserves before September 30th, involving 8 enterprises. On August 9th, the Jiangxi Jianxiawo mining area under Ningde Times suspended mining due to the expiration of its mining rights certificate, and the shutdown may last for more than three months. As soon as the news was released, the market reacted violently. On August 11th, the main contract LC2511 for lithium carbonate futures hit the daily limit up, reaching 81000 yuan/ton, an increase of 8%. At present, except for the expiration of the mining license for the porcelain clay mine in the Jianxiawo mining area of Ningde Times, the mining licenses of the other seven mines will expire after 2027. The probability of a complete shutdown of the mine during the renewal period of the mining rights certificate is relatively low.
In the short term, the suspension of production at the Ningde Times mining site has had an impact on the domestic supply of lithium mica. However, in terms of supply structure, the production at the salt lake site has not been directly affected, and overseas imports have also provided an increase in supply.
Demand side: The off-season for new energy vehicles is not weak, and the demand for energy storage is growing structurally
Resilience of demand for new energy vehicles:
In July, the wholesale sales of new energy passenger vehicles in China reached 1.18 million units, a year-on-year increase of 25% and a month on month decrease of 4%, which is in line with seasonal characteristics. At the policy level, the reduction and exemption of purchase tax for new energy vehicles and the trade in policy will continue until next year, and it is expected that demand will maintain steady growth in the second half of the year. However, there is a risk of a ‘weak peak season’, and if the production schedule for August and September falls short of expectations, it may suppress the upward potential of prices.
Differentiation of demand in the field of energy storage:
In the short term, large-scale energy storage project bidding is strongly driven by policies, but the growth rate of household energy storage has slowed down due to insufficient economic viability. In the long run, the penetration of sodium batteries in the energy storage field may divert some lithium demand. However, the current cost of sodium batteries is still higher than that of lithium batteries (0.5 yuan/Wh vs 0.32 yuan/Wh), and large-scale substitution still requires time.
The data analyst of Business Society’s lithium carbonate believes that the price of lithium carbonate has been operating strongly due to supply disturbances recently, but in the medium term, attention should be paid to overseas incremental release and demand verification.