2024 the world's largest lithium mine has crashed! Is the price of lithium carbonate taking off?

2024 the world's largest lithium mine has crashed! Is the price of lithium carbonate taking off?

On January 10th, approximately 500 protesters in northern Chile held a demonstration, blocking access to the salt flats of Atacama, the world's largest lithium deposit.

According to Yermin Basques, the head of the indigenous community in Toconao, local groups are blocking public roads leading to the mining operations in the southern salt flats, preventing workers, supplies, and access to lithium mines. The person in charge stated that indigenous communities were marginalized during negotiations between Chile's private lithium mining company SQM and Chile's national copper company Codelco in December.

The agreement reached in the negotiation indicates that SQM and Codelco will cooperate from 2025 and continue until 2060 for future lithium resource development and production in Atacama.

It is reported that the indigenous community represented by Basque is the largest indigenous community in the Atacama region. The demand is that the blockade will continue indefinitely unless Chilean President Boric personally goes to Atacama to negotiate with the SQM with the indigenous people.

The Atacama Salt Flats hold 90% of Chile's lithium reserves, and Chile is also the country with the world's largest proven lithium reserves. SQM and Albemarle from the United States are both mining and extracting lithium resources from the Atacama Salt Flats.

It is expected that protests will push up the price of lithium carbonate in the short term, but similar protests may occur from time to time in the future, bringing great uncertainty to the supply of lithium carbonate in Chile.

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Lithium battery material end

Lithium carbonate:

This week, the domestic lithium carbonate market was mainly characterized by narrow fluctuations, with spot prices of electric carbon ranging from 95000 yuan/ton to 100000 yuan/ton, and industrial carbon prices slightly decreasing compared to the previous period. According to feedback from many manufacturers, due to the pre demand of battery companies in February, the spot trading volume has slightly improved recently. However, downstream companies are still significantly suppressing prices, and lithium salt companies are mostly on the edge of losses. Some manufacturers in Jiangxi have increased production restrictions, mainly focusing on long-term supply. Traders still have a certain amount of inventory, hoarding for inflation or short selling for hedging, depending on market performance.

In terms of raw materials, the mainstream offshore price of Australian mines this week is between $850-900 (FOB), and based on this, the domestic lithium salt cost ranges from 95000 to 97000. Due to cost pressure, some high cost lithium mines in Australia have started to reduce production.

From the perspective of supply and demand, the current domestic lithium carbonate market is still in a situation of weak supply and demand, and there is no obvious driving force for price increases. However, from an emotional perspective, there have been continuous positive news in the market recently (such as the shutdown of some Australian mines, the shutdown of some Chinese owned mines in Jinba, the increase of lithium salt production restrictions in Jiangxi, rumors of lithium carbonate storage, and the drop in lithium carbonate shipments in Chile in December). Although the impact of individual interpretations on the market is very small, when combined, there is still a certain degree of repair to market sentiment, which is an explosive point. Today, the Chilean salt lake road closure incident and the estimated sales of 11.5 million new energy vehicles by the China Association of Automobile Manufacturers in the next 24 years played a good role, leading to a sharp rise in futures prices. In the short term, it is expected that there is still a possibility of an increase in lithium carbonate futures prices, and the spot market will be mainly wait-and-see for the time being.

Latest price of lithium carbonate on January 11th:

Battery level 99.5%: 97000 to 101000 yuan/ton

Industrial grade 99.0%: 82000 to 85000 yuan/ton

Ternary materials:

This Wednesday, the performance of the metamaterial market remained stable, with prices temporarily operating steadily. Currently, mainstream enterprises have reported a relative preference for January expectations, and market supply has remained relatively stable compared to December. This is related to some orders from February being completed earlier than January.

This week, the demand for precursor materials in the market has remained stable with an increase. Mainstream enterprises have reported that some overseas projects are still viable, and coupled with domestic demand highlights, the construction situation has remained relatively stable. Recently, raw material smelters have raised prices due to low inventory levels, but the transmission difficulty is high. In the short term, prices are expected to remain stable.

Latest prices for ternary materials on January 11th:

Single crystal type of ternary material 5 series: 128000 to 138000 yuan/ton

Triple material 8 series 811 type: 155000 to 164000 yuan/ton

Lithium iron phosphate:

The demand for lithium iron phosphate in the market is not strong this week, and the industry is still not optimistic about the market expectations for February, believing that the market will be difficult to recover before the Spring Festival. Due to the stable price of lithium carbonate and the stable operation of lithium iron phosphate prices; In terms of lithium carbonate, some positive electrode factories believe that there is limited room for price decline and have started to stock up slightly.

In terms of iron phosphate, some enterprises have a production rate of only 10%. On the one hand, they did not receive orders due to poor demand, and on the other hand, they would rather stop production than accept orders due to low prices.

Latest price of lithium iron phosphate on January 11th:

Lithium iron phosphate power type: 425-45500 yuan/ton

Negative electrode material:

This week, the negative electrode material market was relatively sluggish, with stable production in January and some orders being produced ahead of schedule, resulting in relatively stable orders and output. Subsequently, some enterprises may face pressure from a decrease in production, mainly due to weak downstream demand and relatively abundant production capacity. Negative electrode profits continue to be under pressure, and some products have already incurred losses. Reducing costs and increasing efficiency is still the mainstream strategy in the industry. At present, negative electrode enterprises mainly cope with the fierce competition in the future market by adjusting the proportion of raw materials and developing new technologies.

There has been no significant change in the needle coke market this week, and downstream demand is average. The rising prices of raw materials for coke production have increased cost pressures. The price of petroleum coke has been rising all the way, with a significant increase in low sulfur coke. Manufacturers have reduced their supply, and China Petroleum Refinery has taken the lead in proposing to reduce production, leading to an increase in industry prices. Some enterprises have raised prices by 300 to 400 yuan/ton. The domestic price of low sulfur coke has increased, and the competitiveness of imported low sulfur coke has slightly increased.

Negative electrode material price on January 11th:

Negative electrode material natural graphite mid end product: 39000-45000 yuan/ton

High end power negative electrode material artificial graphite: 52000-67000 yuan/ton

Middle end negative electrode material artificial graphite: 26000-40000 yuan/ton

Electrolyte:

This week, the demand in the electrolyte market is weak, and some manufacturers are preparing for the holiday. The overall market operating rate and shipment volume have slightly weakened due to the existence of expectations, and the overall market sentiment is relatively stable; The price of electrolyte has slightly decreased this week, and it is expected that there will be a stabilizing trend in electrolyte prices.

In terms of raw materials, the operating rate of lithium hexafluorophosphate market continues to decline, and some manufacturers have started to stop production, resulting in a decrease in overall market shipments; This Saturday, there was a slight adjustment in the price of fluorine, and with the tight supply, there is a trend of price increase for hexafluoride; The operating rate of the solvent market continued to decline this week, and prices remained stable; The additive market has sufficient production capacity, the operating rate continues to decline, and prices have slightly decreased.

In the short term, the overall market is in a low demand season, and downstream manufacturers are more cautious in purchasing raw materials. It is expected that there will still be a 10% decrease in demand in January.

Electrolyte price on January 11th:

Domestic production of lithium hexafluorophosphate: 65000-68000 yuan/ton

Power ternary electrolyte: 22500 to 27500 yuan/ton

Lithium iron phosphate electrolyte: 1650-20500 yuan/ton

Diaphragm:

This week, the demand in the diaphragm market continued to be sluggish, and the shipment volume in December fell short of expectations. The shipment volume this month remained unchanged from last month. Compared to the market peak in November last year, demand has decreased by 20% -30%. The market is unlikely to improve before the Spring Festival, and demand will further decrease. Manufacturers have reported that market demand is showing differentiation, with some companies having a higher proportion of customer structure and overseas customers performing better, while companies mainly targeting downstream top customers face more risk of cutting orders.

Latest price for diaphragm on January 11th:

Basement membrane 9 μ M/Wet method: 0.9-1.2 yuan/square meter

Basement membrane 16 μ M/dry method: 0.45-0.55 yuan/square meter

Base membrane 9+3 μ Ceramic coated diaphragm: 1.15-1.5 yuan/square meter

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Downstream demand for lithium batteries

Battery:

This week, the prices of power battery cells have declined. As the industry enters the year-end stage, the operating rate has not increased, and some popular models in the landscape have been stimulated. However, the overall demand in the three major areas of power, energy storage, and digital consumption during the traditional off-season has shown a downward trend. It is expected that the market situation will not improve significantly before the Spring Festival.

Latest price for lithium batteries on January 11th:

Square ternary power cell: 0.46-0.53 yuan/Wh

Square lithium phosphate iron power cell: 0.36-0.46 yuan/Wh

Square ternary (high nickel): 730-840 yuan/KWh

New energy vehicles:

According to the National Passenger Car Market Information Joint Conference (CPPCC), a total of 8.92 million new energy passenger cars were produced in 2023, a year-on-year increase of 33.7%; Accumulated wholesale of 8.864 million vehicles, a year-on-year increase of 36.3%; Accumulated retail sales of 7.736 million vehicles, a year-on-year increase of 36.2%; Accumulated exports of 1.048 million vehicles, a year-on-year increase of 72.0%. The annual penetration rate was 35.7%, an increase of 8.1 percentage points.

In the first week of 2024, the new energy insurance coverage was released. According to the list, Wenjie's sales exceeded Ideal Automobile, and Ideal Automobile's sales sharply decreased from 14300 units in the last week of last month to 4300 units. Industry analysis task, ideal current situation: Firstly, last month we enjoyed the year-end car purchase dividend and overdrawn the January car purchase demand in advance; The second reason is that the launch of Ideal MEGA has been postponed due to the inability to meet the annual subscription deadline, resulting in 20-30% cancellations; Thirdly, the production capacity of the Wenjie M7 has climbed, and the launch of the Wenjie M9 at the end of the year has once again become popular, with the benchmark being the Ideal L9.

Energy storage:

This week, the demand for energy storage battery cells in the market was sluggish and prices remained stable. The operating rate of enterprises is low, and some enterprises have stopped production, resulting in a backlog of inventory at the end of the year, especially for 280Ah large battery cells. Some companies had excessive inventory at the end of the year, resulting in poor shipment volume in January. In terms of bidding and tendering, there is a large amount of centralized procurement in the market, and the market is stable. The growth rate of the energy storage market is expected to be conservative this year, at 30% -40%. The construction of new energy in the Northwest Base promotes the development of the distribution and storage market. Due to the recent construction of multiple large new energy bases, the downstream market demand for large storage is still acceptable.