Lithium carbonate industry is expected to be oversupply and prices are falling

The supply of lithium salt market is not diminished, and the subsidy of the new policy is approaching to compress the demand of the middle and lower reaches, resulting in oversupply in the short term. It is expected to continue to decline slightly before mid-June.

Price continues to pull back

Since 2018, the market price of battery -grade lithium carbonate has dropped significantly. In the past six months, it has dropped from 175,000 Yuan/ton to the current 143,000 Yuan/ton, a drop of 22%. The latest data from Baichuan Information shows that the price of industrial grade lithium carbonate manufacturers has been lowered to 135,000 Yuan/ton, the actual transaction price is 1.25-12.8 million Yuan/ton; the price of lithium hydroxide is lowered to 145,000 Yuan/ton. The actual transaction was around 140,000 Yuan / ton.

Changjiang Securities said that in the first quarter, the demand for upstream resources in the midstream materials and battery sectors was insufficient, and the leading battery leader started to recover faster, but the operating rates of the second and third-line battery factories and their supporting materials, especially iron-lithium, were insufficient digested last year's finished goods and channel inventory.

In the first quarter of 2018, the total production and sales of domestic new energy vehicle terminals was brilliant, and the output of the certificate was increased by 203% year-on-year. But overall, the demand for upstream resources in materials and batteries is still insufficient. China Chemical and Physical Power Industry Association data show that in the first quarter of 2018, the overall output of cathode materials continued to decline. The main decline is mainly lithium iron phosphate products. After a substantial reduction of 35.5% in the fourth quarter of 2017, the first quarter of this year continued to reduce 19.1%, with a cumulative reduction of nearly 50%.

Fear of oversupply

At the same time as the price of lithium carbonate has been adjusted, the supply of lithium carbonate is further accelerating, and it is expected that the price of lithium carbonate will be further suppressed in the future.

Up to now, the planned production capacity of lithium carbonate and lithium hydroxide, which is known to be released this year, is close to 100,000 tons, and the annual production of lithium carbonate in 2017 is only about 80,000 tons.

The expansion project of lithium carbonate enterprises will gradually enter the release period in the second half of the year. Ganfeng Lithium has an existing production capacity of 18,500 tons and a planned production capacity of 17,500 tons. It is expected that the new production capacity will be launched in the fourth quarter of 2018. Tianqi Lithium has an existing production capacity of 27,500 tons and a planned production capacity of 24,000 tons. It is expected that lithium hydroxide products will be trial-produced by the end of 2018.

In the fourth quarter of 2017, Shandong Ruifu's new capacity production project of 20,000 tons will continue to increase. After 2018, its production will continue to expand. The new production lines of Ronghui General and ZhiYuan Lithium have been completed and are now in the stage of commissioning and trial production. It is expected to enter the market in the second half of the year, when about 2,000 tons of lithium carbonate will be added every month.

The author believes that in the fourth quarter, the expansion projects of Ganfeng Lithium Industry and Tianqi Lithium Industry will be put on the market one after another. In addition, the lithium battery industry will enter the traditional off-season in the fourth quarter, and the oversupply of lithium carbonate will become more obvious. Under the impact it will cause a sharp price decline.

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