China's lithium carbonate prices doubled in four months, lithium salt listed companies have announced production expansion plans

Lithium carbonate is one of the necessary raw materials for the production of lithium batteries. As of March 12, the average market price of domestic battery grade lithium carbonate was 83,500 yuan per ton, with a rise of 6,000 yuan per ton in a week. The spot price in four months has doubled, and it will be increased almost every other day.Not only lithium carbonate, but other lithium salts used in lithium-ion batteries have also continued to rise in price, with prices up nearly 60% since January, 35% for lithium hydroxide and nearly 20% for lithium iron phosphate.

It is reported that this round of lithium carbonate price rise is mainly caused by the imbalance between supply and demand. From the perspective of supply, the shortage of ore resources is also one of the main factors leading to the rise of lithium price this time.On the one hand, it is caused by the epidemic. On the other hand, the low price of ore in the past few years has led to some bankruptcies and stop-production of overseas mines.From the beginning of 2021 to the present, the gap between supply and demand is probably around 20 to 25 percent.

Since the second half of last year, the sales of new energy vehicles have been increasing month by month, and the installation of lithium batteries has increased significantly, leading to a significant growth in the demand for lithium salts such as lithium carbonate.China Association of Automobile Manufacturers data show that in February 2021, China's power battery loading capacity of 5.6GWh, up 832.9% year on year, among which, the three-way battery loading of 3.3GWh, up 538.6% year on year;Lithium-iron phosphate batteries were loaded with 2.2GWh, up 2826% year on year.

Under the significant mismatch between supply and demand, recently, lithium salt listed companies have also announced plans to expand production and increase production, increase the guarantee supply of lithium resources.Ganfeng Lithium acquired Yili Hongda, and then indirectly owned the Qinghai Province Qaidam Yiliping Lithium Salt Lake Project.Shengxin Lithium Energy has signed an Off-Purchase Agreement with AVZ Mining, which owns the world's largest amount of lithium mineral resources, to purchase spodumene concentrate. With the release of subsequent production capacity, the price of raw materials will also ease.However, in the short term, upstream raw material prices skyrocketed, downstream new energy vehicle enterprises cost reduction and efficiency demand unchanged, for lithium battery manufacturers, the pressure is still not small.