新闻资讯
新闻资讯

Setting a new historical high, the days of lithium companies "making money effortlessly" have just begun!

Time

2022-09-22 10:00

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Five months later,the "lithium frenzy" is back.

 

Recently, the price of battery-grade lithium carbonate has returned to500,000 yuan/ton high. According to Baichuan Yingfu data, as of September 15, the average market price of domestic battery-grade lithium carbonate reached 510,000 yuan/ton, with mainstream transaction prices around 510,000-520,000 yuan, and there have been quotes of 530,000 yuan/ton..

 

What’s crazier is that,on September 20, Pilbara's ninth lithium concentrate was traded at 6,988 USD/ton, corresponding to a lithium carbonate cost of about 510,000 yuan/ton including tax. This batch of concentrate is expected to be shipped between October 20 and November 20, and considering reasonable logistics turnaround time, the corresponding lithium salt is expected to hit the market as early as January 2023.

 

 

The development of upstream lithium resources is not a straightforward process; it is precisely due to the mismatch in production cycles between upstream and downstream that the fundamental reason for the supply's inability to respond quickly under the explosive demand for lithium.

 

Under the tight supply pattern, the resource end remains an important variable for future lithium price trends, and the profits of the entire industry chain will naturally need to gradually increase.

 

According to statistics from a certain agency on the annual reports of major lithium companies,at the beginning of 2021, 10% of the final profit from lithium carbonate sales was allocated to the upstream lithium mining companies, while 90% was taken by the lithium salt companies in the lithium chemical sector. However, by the end of July 2022, a huge reversal had occurred; of the same 100 yuan profit, 65% was taken by the upstream lithium mining companies, leaving only 35% for the lithium salt companies.

 

The profit margin left for lithium salt processing companies is getting smaller and smaller.
 

 

In the era of resource supremacy, having a mine at home is just so"unreasonable"! Companies with a high self-sufficiency rate in resources can naturally maximize profits through their own supply guarantees and low-cost locking.

 

Tianqi Lithium is currently the only lithium resource company in the domestic ore lithium extraction industry that achieves100% self-sufficiency in raw materials. The mining rights of the Greenbushes lithium spodumene mine in Australia, the lithium spodumene mine in Yajiang, Sichuan, a 20% stake in the Zhabuye mine in Shigatse, and about 23% stake in Chile's SQM give it access to large-scale, low-cost, and high-grade lithium resources worldwide.

 

Salt Lake Co., also achieved a self-sufficiency rate of100% thanks to the resources of the Qarhan Salt Lake. According to its annual report, the production cost of lithium carbonate per ton in 2021 was less than 30,000 yuan, which, compared to today's lithium carbonate prices, makes one marvel at how profitable it is to have lithium.

 

Ganfeng Lithium, as a "big player" in lithium resources,holds a large amount of ore and brine resources globally, but the overall development progress is relatively slow. Currently, the main source of raw materials is still the second-largest lithium mine in Australia, the Mount Marion lithium mine, in which it holds a 50% stake. According to its publicly disclosed data, the self-sufficiency rate of lithium ore used for lithium salt production is about 40%. As the company's controlled resource projects are gradually put into production, it is expected that the supply proportion of its own resources will reach about 70% in the future.
 

 

In addition to the above three companies, large lithium enterprises such as Yahua Group and Shengxin Lithium Energy have low self-sufficiency rates. According to estimates by Tianfeng Securities, Shengxin Lithium Energy'sraw material self-sufficiency rate in 2022 was 13.23%, while Yahua Group's raw material self-sufficiency rate was around 24%. This is just an estimated figure and may differ from the actual situation.

 

However, with the launch of many projects, Yahua Group plans to exceed a self-sufficiency rate of 50% by2025, and Shengxin Lithium Energy expects a self-sufficiency rate of over 70% by 2025. Meanwhile, Zhongmin Resources, which acquired the Bikita mine in Zimbabwe this year, expects to achieve a self-sufficiency rate of 100% by 2024.

 

Against the backdrop of energy structure transformation, lithium demand is growing rapidly, while the release of incremental resources is relatively slow. Global lithium resources remain tight, and under resource bottlenecks, industry chain profits are gradually increasing, allowing lithium resource companies to continue making profits for a while longer.

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