Will the upward price of lithium carbonate affect downstream manufacturers

What are the factors behind the rise in the price of lithium carbonate in this round?
Experts said: “In the past year, the price of lithium carbonate has risen six times. The fundamental reason for this round of price rise is the imbalance between supply and demand.

Since the establishment of the dual carbon goal, the demand and production of new energy vehicles have been hot, and the demand for energy storage batteries has also ushered in. Explosive growth, its core resource lithium carbonate demand continues to increase, but production has not grown much.”

Supply demand mismatch continues

A few days ago, Albemarle, the world’s largest producer, announced an increase in global demand for lithium carbonate production while announcing its 2021 results. Albemarle raised demand for lithium carbonate in 2025 to 1.5 million tonnes from 1.14 million tonnes.

At the same time, Albemarle also predicts that the overall global demand for lithium carbonate will soar to 3.2 million tons in 2030. This has directly driven the rise in global lithium carbonate prices.

According to data, in January, China’s power battery output totaled 29.7GWh, a year-on-year increase of 146.2%.

At the same time, the supply of lithium resources is not optimistic. The report pointed out that the increase of lepidolite and the progress of production in 2021 are not as good as market expectations. The output of power batteries is easily digested by the explosive demand.

Some analysts said: “On the one hand, due to the overhaul of Chinese lithium salt enterprises, the supply of lithium carbonate remained low in February, and the development of production growth was relatively slow.

On the other hand, due to the relatively difficult development of lithium resources, the increase in the supply and expansion of lithium carbonate in China is limited for a certain period of time, and the progress of global lithium mine expansion is not optimistic, which makes the overall supply increase of lithium resources limited in the near future.

At the same time, the demand of small enterprises continues to increase, especially the production and sales of new energy vehicles continue to exceed expectations, driving the production and sales of cathode materials to release, and the demand for lithium carbonate remains strong. “

At the same time, it is believed that from the current situation, China’s lithium carbonate production capacity will not increase much in 2022. In terms of imports, there is a risk of disturbance to the supply of lithium concentrate.

In addition, behaviors such as lithium mining enterprises seeking to extend the industrial chain have challenged the raw material guarantee of Chinese lithium salt enterprises, and the production indicators of existing mines may continue to be lowered.

Lithium carbonate prices remain bullish in the long run

The rising price of lithium carbonate in large enterprises has increased the pressure on battery manufacturers of small and medium-sized enterprises. 30%-45% of the cost of power batteries is mainly in the cathode material, and lithium is the core raw material of the cathode material.

The price of lithium carbonate continues to rise, and lithium resources have gradually become the most critical link in the supply and demand of the battery industry chain. Some lithium carbonate companies have opened the current price transaction mode. Customers who come to purchase lithium carbonate will trade at the current price on the day of pickup, which shows the degree of shortage of lithium carbonate supply.

Another analyst said: “The skyrocketing price of lithium carbonate has a huge impact on manufacturers of lithium batteries and even new energy vehicles, and the rising cost has left many manufacturers with no profit margins.

It should be said that the core of the operation of battery manufacturers in small and medium-sized enterprises in the future , it lies in the bargaining power for lithium carbonate, which is similar to traditional industries such as steel, and the raw materials of large enterprises have obtained the profit space of many small and medium-sized enterprises.”

Analysts believe that the lithium resources used in lithium batteries are mainly the cathode materials in the battery cells and the lithium hexafluorophosphate raw materials used in the electrolyte, and the cost of lithium carbonate raw materials accounts for about 10% of the cost of lithium battery cells.

As the price of lithium carbonate continues to rise, the price of lithium batteries will also rise to a certain extent, which may eventually affect the sales of new energy vehicles, thereby slowing down the development of all links in the lithium battery new energy industry chain.

Regarding the trend of lithium carbonate prices in the future, analysts believe that the global lithium resources are mainly concentrated in the southern hemisphere. Although China’s lithium resources are rich in reserves, due to the rapid development of China’s new energy battery industry, the degree of dependence on imports of lithium resources gradually increase.

The world’s largest exporter of lithium carbonate is Australia, while China’s lithium resources are mainly concentrated in the Qinghai-Tibet Plateau, where mining difficulty and cost are high, and production capacity is limited. Therefore, the price of lithium carbonate is likely to be bullish in the long term in the future.

Analysts believe that although the lithium market demand will remain high in the next few years, the supply of lithium resources in South America and Australia may encounter problems, but lithium resources with lower grades in other countries can be developed and utilized.

In general, lithium resources are rich in reserves, but there are difficulties in mining and extraction processes. In the future, with the improvement of lithium mining technology, the expansion of lithium carbonate production capacity and the improvement of recovery and recycling, the global lithium carbonate supply and demand will gradually return to a balanced state in the near future.

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The economy of lithium battery recycling is highlighted

The price of battery-grade lithium carbonate continued to rise. According to data, the average price of battery-grade lithium carbonate reached 430,000 RMB/ton on February 17. Under the background of high lithium prices, the economics of lithium battery recycling is highlighted. Lithium battery recycling helps to make up for the supply gap of upstream resources, especially lithium resources. China’s recycling market has broad space and development prospects.

Previously, a notice issued by China proposed to improve the management system and strengthen the traceability management of the whole life cycle of new energy vehicle power batteries. Promote the upstream and downstream cooperation of the industrial chain to jointly build recycling channels and build a cross-regional recycling system.

Promote the safe echelon application of waste power batteries in the fields of backup power, charging and replacing power, etc. The regulatory policies for power battery recycling have been introduced one after another, which is conducive to further promoting the standardized development of the industry.

Dishengli: The main business of the subsidiary is the recycling, processing and recycling of new energy waste lithium batteries and other related businesses;

Tianqi: has cooperated with FAW to jointly establish a power battery recycling system, jointly build a power battery recycling platform, strengthen the traceability management of power batteries, and jointly build a shared recycling service network.

Beyond Technology: It is a comprehensive environmental protection enterprise specializing in solid waste treatment and resource utilization. Its subsidiaries are involved in battery recycling projects.