Energy Metal Industry Dynamic Report: Production Schedule Expected to Stabilize on a Month on Month Basis, Lithium Prices Still Supported

Core viewpoint

Lithium: Due to the continued higher than expected consumption in the fourth quarter, there has been a monthly supply-demand mismatch in domestic lithium carbonate, resulting in a shortage of lithium carbonate at the monthly level and de stocking. According to Baichuan, compared with last month, the orders of downstream battery plants and lithium iron plants in December mostly remained unchanged or declined slightly, partly because of the year-end performance of these companies; Secondly, the 'trade-in "policy is coming to an end, which continues to stimulate consumers' enthusiasm for cars purchase. The market demand for terminal car is improving, and the production and sales data of power battery units show an unexpected increase; In terms of energy storage, overseas industrial and commercial enterprises have a good demand for energy storage, and energy storage orders are still sufficient in December. Therefore, it is expected that the production progress in December will remain stable compared with last month, and lithium prices will still be supported. 

Industry dynamic information

Lithium: According to Baichuan Fu Ying, the average market price of industrial-grade lithium carbonate this week is 74000 yuan/ton, down 5.7% from last week. The average price of battery grade coarse-grained lithium hydroxide was 69000 yuan/ton, an increase of 0.7% from last week. On the supply side, the overall production of lithium carbonate in China remained stable this week, with increased hedging by manufacturers in the early stage and relatively active production. Top manufacturers continue to operate at a high level, while the orders of contract manufacturing companies have increased this month. The production capacity of enterprises that have recently resumed production in Shanghai and Malaysia is still rising. Manufacturers are actively shipping goods, and some companies have pre-sold the surplus products this year. The total inventory of lithium carbonate decreased slightly, while the inventory of manufacturers picked up. Downstream enterprises maintained safety stock, while trade and other stocks increased slightly. As futures warehouse receipts is being cancelled, the number of warehouse receipts has decreased ahead of schedule. The production date of the new warehouse receipt for next month must be within two months. On the demand side, downstream cathode output remained at a relatively high level, and the overall output of Ferrous lithium phosphate remained stable in December compared with last month. The output of top manufacturers increased or decreased, and the export market of energy storage was relatively good. During the week, the price of lithium carbonate fell, while the downstream bulk purchases rose slightly, and the prices was mostly at low levels. The new long-term discount for upstream and downstream companies is still under discussion, and some downstream companies are waiting for the negotiation results with major battery manufacturers. At present, according to the downstream understanding, it is difficult to discount new long-term orders, and the pricing method is still based on website prices settlement, so it is difficult to integrate futures prices. In terms of resource, the significance of independent control of domestic lithium resources is prominent.