Energy Metal Industry Dynamic Report: Supply and Demand Double Increase, End of Year Off Season Not Weak

Lithium: According to SMM, the total domestic production of lithium carbonate in November was 64000 tons, with a month-on-month increase of 7.5% and a year-on-year increase of 48.8%. The production of lithium hydroxide was 30000 tons, with a month-on-month decrease of 2.1% and a year-on-year increase of 43.1%.

It is expected that the production of lithium carbonate in December will be 70000 tons, with a month-on-month increase of 8.5%. The increment will mainly come from the end of lithium ore. The flexible conversion of lithium hydroxide to lithium carbonate is expected to increase production by 25,000 tons, up by 15.9% from the previous month. On the consumer side, the domestic production of iron phosphate in November was 286000 tons, with a month-on-month increase of 9.6% and a year-on-year increase of 150.6%. The output of ternary materials was 61000 tons, up 3.8% from the previous month and 9.2% year-on-year. It is expected that the downstream prosperity will continue in December, and both iron, lithium and ternary materials will maintain similar levels to those in November, only slightly lower than last month. Stimulated by trade-in and rush to install, the off-season at the end of the year is not weak, far exceeding expectations. Supply and demand increased in November, and the prosperity will continue in December.

Lithium: According to the statistics of Baichuan Fu Ying, the average market price of industrial-grade lithium carbonate this week was 73000 yuan/ton, down 1.35% from last week. The average price of battery-grade coarse-grained lithium hydroxide was 69000 yuan/ton, which was the same as last week. On the supply side, the overall output of lithium carbonate in China has increased this week, and the high-level futures hedging of lithium salt plants has increased. Production has been very active, and some manufacturers' output surged towards the end of the year, which led to an increase in output. Some manufacturers have stopped production and are actively seeking for mining and OEM to resume production. The surplus of the big factory within the year has been guaranteed or pre-sold.

Chile's exports to China were still high in November, and it is expected that domestic imports will remain above 20000 tons in December. The total inventory of lithium carbonate has increased, while the inventory of manufacturers has rebounded. The downward prices has led to the replenishment of downstream stocks to a greater extent, leading to a slight decline in trade stocks and an increase in other stocks in the market. After the centralized cancellation of futures warehouse receipts, the trading volume rose to 29400 tons. On the demand side, the demand in the energy storage and power markets is improving, the demand for batteries is still high, and many leading material manufacturers are keeping full production. Downstream procurement tends to rely on long-term contracts and customer supply, and the single purchase volume is small, and the mentality of price reduction is strong, and there is no obvious hoarding mood. The new long-term order discount for upstream and downstream has not been fully negotiated. In terms of resource, the significance of independent control of domestic lithium resources is prominent.