2024 China Lithium Industry Development Report 2
（3） Market price
In 2023, due to significant changes in the supply and demand of lithium carbonate and lithium hydroxide markets, the production capacity released by new projects exceeded expectations. A domestic battery company launched a "lithium mine rebate" plan, and Guangzhou Futures launched lithium carbonate futures. New lithium mine projects in Africa and South America were put into operation, and multiple lithium mines in Australia were expanded. During the price decline, multiple factors such as large-scale inventory reductions by car companies, battery companies, and positive electrode materials were also affected, Battery grade lithium carbonate and battery grade lithium hydroxide decreased from approximately 520000 yuan per ton at the beginning of the year to 96000 yuan and 90000 yuan at the end of the year. The decline exceeded industry expectations.
The decline in national subsidies for new energy vehicles at the beginning of 2023 and factors such as overdraft and price reductions and promotions for gasoline vehicles at the end of 2022 led to a slowdown in downstream demand growth for new energy vehicles, triggering pessimistic expectations in the industry chain and driving the rapid decline in lithium carbonate prices. In the following four months, prices plummeted rapidly, experiencing almost two "halving" and dropping to 176500 yuan/ton at one point.
Entering the second quarter, with the improvement of downstream production of lithium carbonate and the gradual balance of supply and demand, lithium carbonate has started to rebound, and the price of battery grade lithium carbonate has returned to over 300000 yuan/ton. Since the end of April, the price of lithium carbonate has gradually shown signs of decline, and the price increase in May has continued to expand. The price increase this time is mostly driven by market demand, which has improved downstream production. Positive electrode material factories are gradually starting to replenish inventory, and the market supply and demand relationship is gradually balanced.
With the completion of downstream replenishment, market procurement gradually returns to rationality, and prices begin to stabilize and fall while demand remains high. In addition, on July 21, 2023, lithium carbonate futures contracts were listed for trading on the Guangzhou Futures Exchange. On the first day of trading, all lithium carbonate contracts showed a significant decline, which later drove the spot price of lithium carbonate into a downward channel again. The spot price of lithium carbonate in August was guided by the weakness of the futures market, and the downward speed further accelerated and continuously approached the cost line. Under the influence of pessimistic market expectations, downstream enterprises actively reduce inventory and delay procurement as much as possible.
In the third quarter of 2023, multiple lithium resource projects at home and abroad were put into operation, and the inventory of lithium salt enterprises began to increase. The market unanimously expected that the supply of lithium salt would exceed downstream demand, and downstream enterprises took the initiative to reduce inventory and delay procurement as much as possible. Lithium carbonate futures prices continued to decline after going public. After some lithium salt factories reduced production at the end of September, prices slightly rebounded in stages, and then bottomed out under multiple negative factors such as a shift in lithium mining pricing model, weak demand, and high inventory. However, the sales growth of new energy vehicles during the traditional peak season of "Golden September and Silver October" in 2023 was not significant, and the overall production schedule in the middle of the industry chain was reduced. The purchasing attitude towards raw material lithium salts weakened, leading to a continuous decline in lithium carbonate prices. At the same time, the increment of overseas lithium resources has gradually arrived at the port, increasing the supply of lithium carbonate market and causing prices to continuously hit bottom.
The price of lithium concentrate has dropped significantly in 2023, and as of December 2023, the price of spodumene concentrate has dropped to $1060 per ton. The decline in ore prices in the early stage was relatively small and lagging behind that of lithium carbonate. After the change in pricing methods, the price of imported lithium concentrate accelerated its decline. After the fourth quarter ore price negotiations in Australia, some mining companies adopted the M+1 pricing method, which to some extent weakened the voice of lithium mines and weakened the support of ore prices for lithium carbonate prices.
Looking ahead, EVTank predicts that global sales of new energy vehicles will reach 18.3 million in 2024, of which 11.8 million will be sold in China and 47 million will be sold globally by 2030. The demand for new energy vehicles, energy storage, and power batteries is expected to continue to grow in the coming years. In the first quarter of 2024, new energy vehicle companies, lithium battery companies, and positive electrode material companies are expected to actively reduce inventory. After the second quarter, downstream demand for new energy vehicles, energy storage, and consumer electronics will gradually return to normal growth. Lithium battery material companies and battery companies will replenish their inventory. In addition, some lithium mines will proactively shut down and reduce production, resulting in a lower than expected growth rate of lithium salt production. Due to global environmental protection, low-carbon The requirements for lithium salt production in areas such as green production are constantly increasing, and the overall cost of enterprises is increasing. The probability of lithium carbonate prices falling to the cost support line of around 80000 yuan per ton is relatively small. Several industry insiders believe that the end of the first quarter and the beginning of the second quarter may hit a bottom and rebound, and prices are expected to rebound to the range of 130000 to 150000 yuan in the second quarter. Prices are expected to remain around 150000 to 160000 yuan in the third quarter, and it is not ruled out that they will fall again to around 120000 yuan in the fourth quarter. The price of lithium carbonate is expected to fluctuate around 150000 yuan per ton in the future.
（4） Market consumption
The latest report released by the United States Geological Survey in 2023 shows that the global end consumer market for lithium is estimated to be 80% for batteries; 7% for ceramics and glass; Lubricating grease 4%; Continuous casting flux powder 2%; 1% air treatment; Medicine, 1%; 5% for other purposes. Due to the widespread use of rechargeable lithium batteries in the growing electric vehicle and portable markets, as well as their increasing applications in power tools, grid storage, and other areas, the consumption of lithium in the battery industry has significantly increased in recent years.
China's lithium consumption accounts for about 95% of the total consumption in the battery industry. The annual consumption of lithium positive electrode materials alone is about 700000 tons of lithium carbonate equivalent, and electrolytes such as lithium hexafluorophosphate consume about 48000 tons of lithium carbonate equivalent. The glass and ceramic industries mainly use lithium feldspar concentrate and spodumene concentrate. The production of metallic lithium consumes approximately 19000 tons of lithium carbonate equivalent lithium chloride, with one-third of the metallic lithium used for the production of primary metallic lithium batteries and solid-state battery materials. Two thirds of the metal lithium industry is used to produce butyl lithium and other organic lithium compounds, which are widely used in synthetic rubber, new pharmaceutical antibacterial drugs, AIDS drugs, essence synthesis, liquid crystal materials and other fields. Some metallic lithium is also used in the production of new materials such as aluminum lithium alloys and magnesium lithium alloys.
（5） Import and export trade
In 2023, China's imports of lithium carbonate increased by 16.65% year-on-year, while exports decreased by 8.1% year-on-year. Imports of lithium hydroxide increased by 23.33% year-on-year, while exports increased by 39.22% year-on-year; The import volume of lithium chloride increased by 895% year-on-year, and the import and export situation of other lithium products is detailed in Table 5. The import of lithium carbonate in China has increased significantly year-on-year, mainly due to the rapid increase in demand for lithium carbonate by domestic cathode material enterprises. At the same time, some industrial lithium carbonate imported has also been converted into products such as lithium hydroxide or lithium fluoride. Due to the rapid increase in lithium salt prices, the total import and export trade volume has also increased significantly. The import trade volume of lithium carbonate has reached 44.33 billion yuan, and the export trade volume has reached 3.59 billion yuan; The export trade volume of lithium hydroxide reached 43.59 billion yuan, and the import trade volume reached 1.29 billion yuan. The total import and export trade volume of lithium nickel cobalt manganese oxide and lithium nickel cobalt aluminum oxide exceeds 60 billion yuan.
（6） Investment and financing situation
According to the announcements and public reports of listed companies, Battery Network has sorted out the start and operation of new energy industry chain projects in 2023. According to incomplete statistics, 235 groundbreaking projects have started, and 204 projects have announced investment amounts, with a total investment of about 1.03 trillion yuan and an average investment of about 5.031 billion yuan; There are 142 trial production and production projects, with 90 announced investment amounts, totaling approximately 458.748 billion yuan, with an average investment of approximately 5.097 billion yuan per project.
According to the announcements and public reports of listed companies, there will be 50 investment and financing projects in the field of lithium battery cathode materials and key raw materials lithium salts in 2023, with 41 announced investment amounts totaling approximately 182.426 billion yuan, with an average investment of approximately 4.449 billion yuan per project; The total investment in lithium resources, lithium carbonate, and lithium hydroxide projects involved in construction and mergers and acquisitions exceeded 45 billion yuan.
Analysis of the Economic Operation Status of China's Lithium Industry
（1） Policy environment analysis
Starting from February 7, 2023, the Development and Reform Commission of Shenzhen City, Guangdong Province, will implement the "Several Measures to Support the Accelerated Development of the Electrochemical Energy Storage Industry in Shenzhen", which will focus on supporting key areas such as raw materials, components, process equipment, cell modules, battery management systems, construction and operation, market services, battery recycling and comprehensive utilization for advanced electrochemical energy storage technology routes, and enhance industrial ecology, innovation capabilities 20 incentive measures were proposed in five areas including business models. The validity period is 3 years.
In March 2023, the Military Civilian Integration Office of the Hubei Provincial Party Committee, in conjunction with the Provincial Development and Reform Commission, the Provincial Department of Economy and Information Technology, the Provincial Department of Finance, the Provincial Department of Ecology and Environment, the Provincial Department of Transportation and other departments, issued the "Several Measures for Supporting the Pilot Demonstration of Green and Intelligent Ship Industry Development in Hubei Province". The "Several Measures" introduces 16 measures from five aspects, including the large-scale application of green and intelligent ships, construction of supporting infrastructure, research and development of key technologies and transformation of scientific and technological achievements, industrial agglomeration development, and optimization of industrial development environment. Through national, provincial, municipal, and county level funding and innovation policies, it supports the research and development, design, manufacturing, application, and supporting of green powered ships and intelligent ships such as liquefied natural gas and batteries in Hubei Province.
On March 10, 2023, the General Office of the Chengdu Municipal People's Government issued the Implementation Opinions on Promoting the Development of the New Energy Vehicle Industry in Chengdu. The Opinion clearly states that by 2025, the competitiveness of Chengdu's new energy vehicle industry will be significantly enhanced, with an industrial scale exceeding 150 billion yuan, a production volume of 250000 vehicles, an industrial zero to zero ratio increased to 1:1, and the utilization rate of vehicle production capacity and the local supporting rate of enterprises will be increased to over 70% and 50% respectively; Strive to achieve 800000 new energy vehicles and 80% electrification of public sector vehicles; 3000 various charging and swapping power stations and 160000 charging stations have been built.
On June 12, 2023, in order to promote the application of new energy vehicles in rural areas, guide green travel for rural residents, and assist in the construction of beautiful rural areas and the implementation of rural revitalization strategies, the Ministry of Industry and Information Technology, the National Development and Reform Commission, and other five departments issued a notice on carrying out the 2023 New Energy Vehicle Campaign to the Countryside. The notice shows that the theme of this event is green, low-carbon, intelligent, and safe - charging cars and adding "green" to rural revitalization. The event will take place from June to December 2023.
On July 19, 2023, the Jiangsu Provincial Development and Reform Commission issued a notice on several measures to accelerate the high-quality development of new energy storage projects in our province. It was proposed that in the development of offshore wind power and other projects in Jiangsu Province, supporting construction of new energy storage projects will be required to promote the coordinated development of new energy and new energy storage. By 2027, the scale of new energy storage projects in the province will reach about 5 million kilowatts.
On July 6, 2023, the Ministry of Industry and Information Technology announced that in order to meet the needs of China's energy-saving and new energy vehicle industry development and technological progress, five departments including the Ministry of Industry and Information Technology, the Ministry of Finance, the Ministry of Commerce, the General Administration of Customs, and the State Administration for Market Regulation recently jointly issued the Decision on Amending the Parallel Management Measures for Average Fuel Consumption and New Energy Vehicle Points of Passenger Car Enterprises, Revise the current "Parallel Management Measures for Average Fuel Consumption of Passenger Car Enterprises and New Energy Vehicle Points", mainly including adjusting the calculation method of new energy vehicle points, establishing a flexible trading mechanism for points, and optimizing other point management systems. The Decision shows that, taking into account technological progress, cost reduction, and changes in point compliance costs, in accordance with the principle of balance between point supply and demand, the average score of standard new energy passenger vehicle models has been lowered by about 40%, and the point calculation method and upper limit have been adjusted accordingly. This decision shall come into effect on August 1, 2023.
On August 25, 2023, the website of the Ministry of Industry and Information Technology released the "Work Plan for Stable Growth in the Nonferrous Metals Industry" jointly issued by seven departments, including the Ministry of Industry and Information Technology, the National Development and Reform Commission, the Ministry of Finance, the Ministry of Natural Resources, the Ministry of Commerce, the General Administration of Customs, and the State Administration of Grain and Reserve. It pointed out that positive progress should be made in promoting the development of domestic resources such as lithium and copper, and an overall plan for the development of key resources and industries such as lithium should be formulated, Accelerate the construction of a strategic mineral resource industry basic data platform, promote key technology breakthroughs and industrial trials such as efficient lithium and magnesium extraction in salt lakes, and the consumption of lithium mica tailings, support the research and development of high specific energy cathode materials, cultivate important non-ferrous metal industry chain "chain leaders" enterprises such as copper, lithium, nickel, tungsten, antimony, etc., and increase the import of raw materials such as lithium concentrate and cobalt intermediate smelting products.
On September 1, 2023, the Ministry of Industry and Information Technology and seven other departments released a stable growth plan for the automotive industry (2023-2024). In 2023, the automotive industry will maintain a stable and positive development trend, striving to achieve annual sales of around 27 million vehicles, a year-on-year increase of about 3%, including sales of about 9 million new energy vehicles, a year-on-year increase of about 30%; The added value of the automobile manufacturing industry increased by about 5% year-on-year. In 2024, the operation of the automotive industry will remain within a reasonable range, and the quality and efficiency of industrial development will be further improved. The plan supports expanding the consumption of new energy vehicles. Implement existing preferential policies such as vehicle and vessel tax and vehicle purchase tax for new energy vehicles, focus on clearing and reviewing subsidy funds for new energy vehicles, and actively expand the proportion of personal consumption of new energy vehicles. Organize pilot projects for comprehensive electrification of public sector vehicles, accelerate the promotion and application of new energy vehicles in urban public transportation, rental, environmental sanitation, postal and express delivery, urban logistics and distribution, and research and explore the promotion of zero emission pilot projects for regional freight heavy-duty trucks, further improving the level of electrification of public sector vehicles. Organize new energy vehicle activities in rural areas, encourage enterprises to develop more advanced and applicable vehicle models, and fully tap into the consumption potential of rural areas. Encourage the application of new energy vehicle battery swapping models and promote the deep integration of new energy vehicles and energy development. Deepen the demonstration of fuel cell vehicles and steadily increase the application scale of fuel cell vehicles.
On October 10, 2023, the Ministry of Industry and Information Technology and four other departments issued the "Outline for the Development of Green Aviation Manufacturing Industry (2023-2035)", which clarifies that by 2025, the energy-saving, emission reduction, and noise reduction performance of domestic civil aircraft will be further improved, the level of aviation green manufacturing will be comprehensively improved, and the development of the green aviation industry will achieve phased results. A safe and effective guarantee system will be basically established. Demonstration application of domestically produced civil aircraft using sustainable aviation fuels, commercial application of electric general aviation aircraft, pilot operation of electric vertical takeoff and landing aircraft, feasibility verification of key technologies for hydrogen powered aircraft, continuous consolidation of green aviation infrastructure, formation of a number of standard specifications and technical public service platforms, effectively supporting the construction of green aviation production and operation systems. By 2035, a green aviation manufacturing system with integrity, progressiveness and safety will be built. New energy aircraft will become the mainstream of development. The safety, environmental protection, economy and comfort of domestic large civil aircraft will reach the world-class level. New general aviation equipment with unmanned, electric and intelligent technical characteristics will be commercialized and applied in a large scale.
On October 20, 2023, in order to promote the improvement of electric vehicle charging and swapping services and orderly carry out the construction and operation rewards of electric vehicle charging and swapping facilities (hereinafter referred to as charging and swapping facilities) in Beijing in 2023, the Beijing Municipal Urban Management Commission issued the Implementation Rules for the Construction and Operation Rewards of Electric Vehicle Charging and swapping Facilities in Beijing in 2023, promoting the improvement of electric vehicle charging and swapping services.
On November 1, 2023, the National Development and Reform Commission and the Comprehensive Department of the Energy Administration officially issued a notice on further accelerating the construction of the electricity spot market, encouraging new entities to participate in the electricity market. By forming time-of-use price signals through marketization, we aim to promote new entities such as energy storage, virtual power plants, and load aggregators to play a positive role in peak shaving and valley filling, optimizing power quality, and exploring new approaches such as "new energy+energy storage"