For the first time in two years, the spot price of lithium carbonate fell below the 150,000 yuan mark Lithium price dynamics

Interface News Reporter | Wang Yong

Although the electric vehicle market is still growing, the slowdown in growth and the sluggish growth of energy storage market demand have led to limited demand for lithium carbonate and continued low prices.

According to Shanghai Ganglian data, the average price of battery-grade lithium carbonate fell by 1,500 yuan/ton to 149,000 yuan/ton on November 20, officially falling below the 150,000 yuan mark.

The price of battery-grade lithium carbonate on other platforms fell below 150,000 yuan first. According to data from Shanghai Nonferrous Metals Network (SMM) on Friday, the price of battery-grade lithium carbonate was 147,000 yuan/ton. This is the first time in two years that the spot price of lithium carbonate has fallen below 150,000 yuan.

On November 20, the SMM platform battery-grade lithium carbonate continued to fall, with an average price of 146,500 yuan/ton, a two-year low, falling for 22 consecutive days, down 5,540 yuan in the past 5 days, and 22,500 yuan in the past 30 days.

As the settlement target of lithium carbonate futures on the Guangzhou Futures Exchange, on November 20, the lithium carbonate price index of Shanghai Nonferrous Metals Network fell by 1,261 yuan to 146,400 yuan/ton.

Lithium carbonate futures also fell day after day, as of the close of November 20, the main contract 2401 fell 1.15% to close at 137,200 yuan/ton, down about 10% from a month ago. At the end of September this year, the price of lithium carbonate futures fell belowfell below 150,000 yuan, but the spot has remained above this level.

Lithium carbonate is one of the main lithium salt products, and the upstream raw material is lithium ore. Battery-grade lithium carbonate is an important raw material for lithium batteries, mainly used for lithium iron phosphate, lithium cobalt oxide and some ternary lithium cathode materials.

At present, the situation of lithium carbonate supply exceeding demand is gradually becoming clear. Li Pan, a lithium analyst at Shanghai Ganglian New Energy Division, told Jiemian News that the total domestic supply of lithium carbonate in November was 53,800 tons, the total demand was 51,000 tons, and the surplus was about 2,800 tons.

In addition to supply and demand, changes in pricing patterns have also contributed to a decline in the cost of lithium carbonate, which in turn has contributed to the price decline.

"The settlement mode of some lithium salt smelters and mines has been switched from M/M-1/Q-1 to M+1 mode. The M+1 model opens up room for lithium carbonate prices to fall. Li Pan said.

Q represents the quarter, and -1 represents the price weighting of the lithium carbonate battery in the previous quarter. M represents the month, and +1 generally means that the monthly average lithium carbonate price is used for the month of arrival.

According to the Shanghai Securities Research Report, Australia's top mines still use the Q-1 pricing model in the fourth quarter, and the short-term pricing power of the top mines is still strong, but the pricing mechanism of some Australia, Brazil and Nigeria mines has been adjusted, from the original Q-1 model to the M+1 model.

The agency pointed out that the price of temporary orders is significantly lower than that of some long orders, and with the further spread of the M+1 settlement model, the overall trend of lithium mines will continue to decline in the future, and the cost of lithium carbonate will gradually decline.

"The downward trend in upstream costs will lead to a further decline in lithium salt prices." Li Pan said that the pricing of lithium mines will also follow the price of lithium salts; The pricing method of downstream cathode materials is metal salt price * coefficient + processing fee, and the price of lithium carbonate will fall, and the price of materials will also fall.

Li Pan expects that in the second half of November, with the gradual arrival of imported lithium salt lithium ore, the supply will be greater than the demand, and the price support will be further weakened.

On the supply side, Aijian Securities said that at present, the lithium carbonate production of lithium salt plants is stable, but due to the relatively high price in the early stage, many companies have accumulated a large amount of lithium carbonate inventory.

The agency pointed out that at present, some downstream cathode material companies are mainly focusing on the strategy of reducing costs and increasing efficiency by compressing the inventory of lithium carbonate raw materials. Although the EV market is still growing, the slowdown in growth and the sluggish growth in energy storage demand have led to weaker-than-expected demand for lithium carbonate, further driving down prices.

According to data from the China Association of Automobile Manufacturers, from January to October this year, the domestic production and sales of new energy vehicles were 7.352 million and 7.28 million respectively, a year-on-year increase of 33.9% and 37.8%, respectively. In the same period last year, the growth rate reached 1.11 times and 1.05 times respectively.

Affected by the decline in lithium prices and the lack of optimism in downstream demand, the prices of lithium iron phosphate, ternary materials and precursors are also declining.

According to Shanghai Ganglian data, on November 20, the average prices of lithium iron phosphate and 523 ternary materials were 53,000 yuan/ton and 160,000 yuan/ton respectively, down 8.6% and 3% respectively from the beginning of the month.

Shanghai Securities believes that the lithium iron phosphate market is currently relatively pessimistic about the expectations for December, especially worried that some battery factories may suddenly reduce the amount of goods, and the current downstream battery factory procurement inventory is maintained below ten days.

For the energy storage market, Shanghai Securities Futures said that the new power supply system has created a relatively large space for the development of energy storage, but the current price war, overcapacity, overseas installed capacity cooling and other problems have followed, making the economic benefits of the energy storage industry chain not high, resulting in a downward revision of energy storage growth expectations.

The agency said that the demand in the field of energy storage weakened significantly in November, and some companies lacked new sources of orders.

From the perspective of profitability, Baichuan Yingfu data shows that the cost of lithium carbonate tons last week was 124,100 yuan, a decrease of 0.5% from the previous month; The gross profit per ton was 24,100 yuan, a decrease of 4.73% from the previous month.

"At the price of 150,000 yuan, the main thing that is more affected is the production capacity of lithium carbonate from external lithium mines, and the enterprises with integrated production of mining + smelting have better cost advantages." Li Pan said.