New energy vehicle market “carrying goods” lithium resource demand soars

The new energy automobile industry “brings goods”, the demand for lithium resources has greatly increased, and the price has risen. Lithium reserves have become the “wealth code”, and the corporate “mine grabbing war” has escalated. The agency believes that the current round of lithium salt prices are still in the upward range, and the upward trend may continue into the whole year of next year.

The “mine grabbing war” heats up

Regarding the rumors that the company’s proposed acquisition of the Canadian lithium company Millennial Lithium is facing variables due to higher quotations, a relevant person in Ganfeng Lithium told a reporter from China Securities News on September 10 that the company is aware of the price increase, but will not increase the price because of the other party. The company abandons the acquisition, and needs to wait for the negotiation situation to see the follow-up progress.

Ganfeng Lithium previously announced that it intends to acquire Millennial Lithium at a price not exceeding CAD 353 million. Millennial is a company listed on the Toronto Stock Exchange. It is mainly engaged in the acquisition, exploration and development of lithium mining rights. Its main assets are the Pastos Grandes lithium salt lake project in Argentina and the Cauchari East lithium salt lake project in Argentina. The main product of Pastos Grandes Salt Lake is battery-grade lithium carbonate produced from lithium-containing salt lake brine. The measured resource of lithium carbonate is 2262,000 tons. The Cauchari East Lithium Salt Lake Project is in the early stage of exploration. If it is successfully developed after the exploration is completed in the future, its main product will be the lithium compound products produced from the lithium salt lake brine.

Ganfeng Lithium said that the acquisition will benefit the company’s business expansion and enhance its core competitiveness.

Driven by downstream demand, lithium resources have become “a must for military strategists,” and “a mine at home” has become the “key” for many companies to unlock their wealth.

Since the beginning of this year, Ganfeng Lithium has successively deployed the Qaidam-liping lithium salt lake in Qinghai Province, two salt lakes in Argentina and the Goulamina spodumene mine project in Mali, Africa, and the acquisition involved more than 4.1 billion yuan.

Shengxin Lithium Energy stated on the interactive platform a few days ago that the company currently purchases externally except for the lithium concentrate produced by Oino Mining. In the future, the company will actively promote the construction, production, and reserve increase of Oino Mining, and at the same time continue to pay attention to the cooperation of domestic and foreign lithium resources, and continuously improve the self-sufficiency rate of lithium concentrate.

Smooth cost transmission

Industrial Securities pointed out that the current lithium salt market is reluctant to sell, and the willingness to adjust prices is strong. Taking into account the limited new effective production capacity, it is estimated that the supply in the second half of the year will be about 130,000 tons, an increase of 38% from the previous month. The tension of upstream raw materials has intensified, and stimulated by the new high auction prices of lithium concentrates, lithium salt companies are generally bullish on the market outlook.

According to data from Shanghai Nonferrous Metals.com, on September 10, the average price of spodumene concentrate was US$1005/ton, an increase of 140.7% this year; the average price of battery-grade lithium hydroxide was RMB 138,500/ton, an increase of 182.7% since the beginning of this year. ; The average price of battery-grade lithium carbonate reported 137,500 yuan/ton, an increase of 167% this year. Some institutional sources said that the current lithium salt price increase has limited impact on the terminal, and the cost transmission is smooth.

In the case of relatively limited increase in resources, the construction of lithium salt smelters is still accelerating, which will promote the continued growth of spodumene demand.

From the perspective of supply and demand balance, Industrial Securities said that this round of lithium prices is still in the upward range, or will continue into the whole year of next year. The demand for new energy may exceed expectations, and the lithium industry may be in a longer business cycle.

Chen Guanghui, a senior analyst at Antaike, told the China Securities Journal that many current lithium resource projects are mostly in the early stage of exploration and technology selection. This means that the increase in the next one to two years is limited, and it is expected that the supply of lithium resources will become more tight in the middle of 2022.

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