Summary: Though the supply and demand of lithium carbonate in H2 2016 may probably still be tense for a while, a stable,
new and reasonable price range can be expected in the future.
Source: Baidu
The increasingly high price of lithium
carbonate has showed a prominent decline recently. In July 2016, the
transaction price fluctuated at USD21,806-22,558/t (RMB145,000-150,000/t), 15%+
down from the highest price range of USD26,317-27,069/t (RMB175,000-180,000/t)
in April this year. This reduction is also the steepest fall since the price
hike in H2 2015.
As insiders put it, influenced by multiple
factors such as subsidy adjustment, "cheating for subsidy' investigation,
enterprise catalogue (meeting power battery regulation), and gradual capacity
release, the tight supply of lithium carbonate has begun to relieve. A lot more
insiders even pointed out that the price decrease of lithium carbonate has
become a tendency and within a short period it will maintain stability and
finally will stay at a reasonable range.
According to statistics from the China
Association of Automobile Manufacturers (CAAM), in H1 2016, 177,000 alternative
energy vehicles (AEV) were manufactured domestically and 170,000 AEVs sold, up
by 125.0% and 126.9% YoY respectively. It's worth noting that despite the fact
that AEV sales has increased, the 177,000 figure only accounted for 24% of the
target, at about 700,000, which was set by CAAM. Therefore, to reach the
expected target, there exists huge pressure.
Moreover, the AEV sales in H1 directly
impacted the output and shipment of power battery and further exerted influence
on the supply and demand of lithium carbonate.
Statistics showed that the domestic output
of power battery in H1 2016 reached 12.05 GWh, of which the shipment was 9.92
GWh. Influenced by subsidy adjustment and enterprise catalogue, the domestic
output of power battery in Q2 decreased quarter on quarter, by 40%+.
"The supply and demand relation of lithium carbonate has undergone
certain changes, as the price has already begun to decline,' commented the
president of Hefei Guoxuan High-Tech Power Energy Co., Ltd., "The declining
tendency has already been formed and a reasonable price will arrive,
optimistically in Q3 or within this year.'
"Instead of prominent increase, the shipment of power battery in H1
decreased and the shipment by the end this year is estimated to be lower than
ever expected. This means that a large number of battery manufacturers won't
get any orders. In reality, structural overcapacity is now very apparent,'
pointed out by another trade source, "When the lithium carbonate price
stays high, downstream manufacturers generally don't sign full-year contracts
with lithium carbonate producers, but purchase based on demand.'
Compared to power battery enterprises,
cathode materials enterprises may be more sensitive about the price reduction
of lithium carbonate.
Li Jigang, deputy general manager of
Tianjin STL Energy Technology Co., Ltd. pointed out that the price of lithium
carbonate has begun to drop and it will decrease further threatened by the
imports of lithium carbonate. Although there is still room for price reduction,
the figure will eventually arrive reasonably at USD15,039-18,046/t
(RMB100,000-120,000/t).
"Recently the price of lithium carbonate has presented a falling
tendency and is expected to stay stable gradually in H2,' stated Beijing
Easpring Material Technology Co., Ltd., "Price hike and slump will not appear
like before and a small extent recovery is most likely to happen. With the
continuous release of new capacity, the price will maintain at a rational
range.'
According to analyst CCM, the further
explosive growth of AEV business in H2 2016 will give a spur to the demand for
power battery and raw materials. However, due to the limited new capacities of
lithium carbonate in 2016, there may still be a period with supply and demand
tension, and a reasonable and stable price range will be secured in the future.
Zhang Jiangfeng, secretary general of the
Lithium Industry Branch, China Nonferrous Metals Industry Association commented
that, the price of lithium carbonate has indeed descended recently, but whether
the tendency will continue or not depends on the supply and demand in H2 as
well as the enormous influence from the oversea lithium resources exploration
and import.
Having had positive attitude towards the
prolonged favorable prospect of AEV market, domestic key lithium carbonate
manufacturers, including Sichuan Tianqi Lithium Industries, Inc., Jiangxi
Ganfeng Lithium Co., Ltd., Tibet Mineral Development Co., Ltd., Steyr Motors
Corp., Jiangxi Special Electric Motor Co., Ltd., Qinghai Salt Lake Industry
Co., Ltd., and Youngy Co., Ltd., are all actively promoting the capacity
expansion projects. However, whether such projects can be successfully put into
operation, and weather the demand for power battery will grow sharply in H2,
exert uncertainties on the market supply and demand of lithium carbonate.
About CCM:
CCM is the leading market intelligence
provider for China's agriculture, chemicals, food & ingredients and life
science markets. Founded in 2001, CCM offers a range of data and content solutions, from price
and trade data to industry newsletters and customized market research reports. Our clients include Monsanto, DuPont, Shell, Bayer, and Syngenta. CCM is a
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Tag: lithium carbonate