Explore behind the rising price of lithium carbonate

With the release of the fourth list of power batteries, the wait and see car companies have hit the sales volume of batteries in the second half of the year. Battery companies and material companies have also entered a hot production. Previously, many companies were waiting to buy lithium carbonate due to the soaring price of lithium carbonate, but with the rapid expansion of production, battery and material companies seem to have to accept the increase in the cost of lithium carbonate.

According to the statistics of EVTank, Xinyi Information, Lithium Salt and Battery Related Associations, the average price of battery-grade lithium carbonate reached 155,000 yuan per ton at the beginning of 2016, an increase of 248 % year-on-year, and the price of battery-grade lithium carbonate at the end of January 2016 reached 18-19 million yuan per ton. By May 2016, The price of battery-grade lithium carbonate was lowered slightly (business statistics 175,000 yuan per ton), but the price remained high.

The rising price of lithium carbonate has pulled the sensitive nerves of industry insiders. Material and battery companies are generally deeply concerned about the unpredictable high price of lithium carbonate. Dissatisfaction with upstream suppliers has also spread in the industry. The industry has voiced various doubts.

An argument over an indictment

People looking at Capital markets will find that, along with lithium carbonate, the share price of lithium-salt-related concept stocks, the market's most watched Tianqi Lithium industry, soared from the lowest 35 yuan / share at the time of the stock market crash to a maximum of 176 yuan / share. In one fell swoop, it became the "Sichuan Stock King."

With the price of lithium carbonate soaring and all the information revealed on the stock market, battery and material companies began to analyze the reasons behind the increase.

At the beginning of 2016, a WeChat article published by Shanshan Energy Public No. “The price of domestic lithium carbonate is soaring in the back” is widely circulated in the industry. This article analyzes the data and points out that the reason for the soaring price of lithium carbonate is A small number of industry oligarchs are responsible for pricing power.

Subsequently, the Sequoia Energy Public issued the "Public Book for the Downstream Customers of Lithium Power", saying that the explosion of lithium power raw materials will "force downstream customers to the edge of the cliff of life and death"; Fangjianhua, president of Guoxuan Gaoke, also said that all parties must raise questions about this unreasonable price increase, and relevant state departments can launch antitrust investigations if necessary.

It can be said that the WeChat data released by Sequoia Energy is detailed and the logic is clear, and people have to doubt the rationality of the price increase of lithium carbonate. Although Sequoia Energy and Guoxuan Gaoke did not explicitly target Tianqi Lithium when they spoke to the outside world, in the eyes of the industry, the spearhead of Sequoia Technology and Guoxuan Gaoke has been very clear. Because it has a 51 % stake in Tailisen, the world's largest lithium miner, Tianqi Lithium controls about 80 % of China's lithium concentrate supply, which also makes it stand at the forefront of public opinion in the soaring price of lithium.

Different positions, different sides.

Although Sequoia Energy is identified as the behind the manipulation of Tianzi Lithium industry, the industry still has different opinions on the soaring price of lithium carbonate. There are different opinions:

Most lithium carbonate manufacturers believe that due to the explosion of downstream electric vehicles, the supply of lithium carbonate products from major manufacturers has been strained. In addition, since the winter of 2015, salt lakes, the raw material base, have been discontinued, and several new domestic and international lithium carbonate projects have failed to reach production on time. As a result of the reduction in supply increments, lithium prices accelerated in the first half of 2016.

Another industry expert believes that the core logic of the price rise of lithium carbonate is the timing mismatch between upstream and downstream production. "The gap between supply and demand continues to widen in 2016, and the demand for inventory upgrading in downstream companies has greatly widened the gap between supply and demand. The first half was the peak of the battery plant, while the production of lithium resources in 2016 was concentrated in the second half of the year, and the timing mismatch led to a rapid increase in prices. "

Another view is that although the explosive price of lithium carbonate after October 2015, but the transaction volume is not large, the price increase is largely "no market price." Many battery companies have long-term contracts with lithium carbonate suppliers, and battery-grade lithium carbonate also maintains a supply price of 60,000 tons. Battery companies should take into account the supply of raw materials when building production lines and respond in advance. "When the factory was built, it did not sign a contract for lithium carbonate, and it was optimistic that new energy would be piled up to build a production line. If it was to be put into production or even put into production, it would be the blame of finding lithium carbonate in the world." After the price of the battery company, it was purchased after the price rose. Lithium carbonate is a temporary blessing. The soaring price of lithium carbonate is "the right thing" for them.

Li Bo, the secret secretary of Tianqi Lithium Industry, said that due to the contradiction between the company and Shanshan Technology in conducting business negotiations on the price and supply of lithium carbonate, Shanshan Energy deliberately targeted Tianqi Lithium Industry, and its analysis of price fluctuations was not Have objectivity.

Zhangjiangfeng, Secretary General of the lithium branch of the China Nonferrous Metals Industry Association, said that Tianqi lithium does not constitute a monopoly because it has less than 20 % of the global lithium carbonate market.

Various versions of the reasons for the price increase of lithium carbonate are circulating in the industry, making it difficult to see the reasons behind the price increase. But on the whole, each voice is based on the interests of its own industry -- batteries and materials companies that see the rising cost of lithium carbonate as fixing prices, while lithium carbonate producers see rising prices as a result of supply and demand imbalances. Price increases are reasonable market behavior.

According to the results of the survey conducted by the battery China Network, due to the high price of domestic lithium carbonate manufacturers, many battery and material companies have begun to seek channels abroad to purchase lithium carbonate.

The page contains the contents of the machine translation.