At the end of November, Duofluoride released the first performance forecast of the lithium battery industry, and it is expected that the net profit in 2023 will be 5600 million yuan-6200 million yuan, a year-on-year decrease of 6817%-71.25%。Industry insiders said that the performance forecast of polyfluoride is only a microcosm of the current situation of the lithium battery industry, and it is expected that the majority of companies with poor performance will account for the majority, and there is a common reason behind this, namelyLithium carbonate"**。I remember that in 2022, lithium carbonate** will continue to rise, and will reach a record high in November of the same year, exceeding 600,000 tons. Almost all the enterprises in the lithium battery industry chain have made a lot of money, especially the lithium salt enterprises. Looking at 2023 again, lithium carbonate ** is not very good-looking, judging from the semi-annual report, more than 50% of enterprises have experienced performance declines or losses, and the industry laughs and calls "a lithium carbonate collapses the entire lithium battery industry chain".
Rapid decline, a slight recovery, and then continue to decline
Let's look at the performance first. Starting point lithium battery noticed that since the beginning of this year, lithium carbonate ** has continued to decline. Based on the monthly average of lithium carbonate, the highest point in January at the beginning of the year was 500,000 tons, and the end of December was about 100,000 tons, with the overall decline of about 80%. Although there was a rebound in the middle of the year, the recovery effect was not good, like a flash in the pan. Specifically, as of April this year, lithium carbonate fell directly from 500,000 tons at the beginning of the year to 200,000 tonsAlthough there was a rebound from April to June, the highest point was around 300,000 tonsIn the second half of the year, it continued to decline until 100,000 tons, and even broke through the red line of 100,000 tons. 
Data**: Starting Point Research Institute (SPIR).Throughout the year, lithium carbonate ** is in a state of "rapid decline, a slight rise, and then a continuous decline". The lithium battery elimination cycle has entered the second half, what is the direction of lithium carbonate in 2024, before making a judgment, we should first understand the reasons behind the change. The starting point of lithium battery collation found that corresponding to the phased changes, the main factors affecting lithium carbonate are also different in each stage and period. From January to April, lithium carbonate** went from high to low, mainly due to supply and demand, terminal market and technological development. With the industry's inherent impression that the new energy vehicle market is improving at the end of the year and the beginning of the year and the energy storage market is continuing to blow out, the wind direction of lithium carbonate in short supply at the end of 2022 will continue at the beginning of 2023 and still maintain the top operation. Then the market heat subsided, and the relationship between supply and demand was clear, resulting in a plummeting opening. At this stage,The change in the relationship between supply and demand is that production capacity continues to increase, and the supply is hopeful that it exceeds the demand. On the one hand, from 2021 to 2022, all parties will compete for lithium layout, and in 2023, it will reach the stage of achievement acceptance, and the lithium carbonate production capacity of some enterprises will begin to be released, and the supply side will increase. On the other hand, domestic lithium carbonate production capacity has increased, and since 2018, lithium carbonate production has continued to grow. According to statistics, the total output of China's 42 lithium carbonate manufacturers in 2022 is about 34290,000 tons, a year-on-year increase of 4884%。The increase mainly comes from the three main producing areas of Jiangxi, Qinghai and Sichuan. There are even voices that expect an oversupply of lithium carbonate after 2024. In terms of end marketsIn 2023, the double impact of the subsidy launch of domestic new energy vehicles and the clearance of fuel vehicles**, and the destocking of the industrial chain, will lead to sluggish demand for lithium. And despite the decline, compared with the previous years, lithium carbonate of more than 300,000 yuan is still the same, and many battery companies are also waiting for further development. The development of new technologies is also an important part of the impact on lithium carbonate, in which sodium-ion batteries are used as an example. 2023 is known as the first year of mass production of sodium-ion batteries, and the high price of lithium has led to the louder call for sodium batteries. The industry believes that sodium batteries will be the first to be used in low-speed and two-wheeled vehicles, energy storage and other fields, and will realize the replacement of some lithium batteries. Combined with the above factors, lithium carbonate ** "avalanche". According to the lithium battery industry search conducted at the beginning of the year, at the end of the first quarter, although the average price of lithium carbonate was reported at 250,000 tons, the purchase of battery companies has fallen to 200,000 tons. They pointed out that the volatility of forward contracts will be more dramatic, and will even drop to about 150,000 yuan. Judging from the current time, it is clear that this judgment has become a fact. The second stage is a short rebound period from April to June, and the starting point of lithium battery looks back at the market data and knows that in May, lithium carbonate once rose continuously. The main influencing factors are the rebound in the demand for new energy markets, the end of lithium battery companies' destocking, and the sequelae of lithium carbonate production, and finally the reason for lithium carbonate. The second quarter of each year is recognized as the peak season of the new energy vehicle market, superimposed on the release of the energy storage market at home and abroad, the recovery of terminal market demand, the completion of battery factories and material factories to inventory, and the action of signing orders at low prices has begun to be frequent. In addition, Chile's strategy of nationalizing lithium resources has restricted the growth of lithium production capacity to a certain extent, coupled with the previous lithium price, some domestic manufacturers have stopped production (market news at that time showed that some lithium salt plants chose to "stop production and raise prices" in the face of falling lithium carbonate prices, although many companies responded to this that the news was untrue, but in fact there was a shutdown and production reduction), and the production capacity was not fully recovered in a short period of time, resulting in a shortage of **. As for lithium carbonate**, on the evening of June 14 this year, the Guangzhou ** Exchange (hereinafter referred to as the Guangzhou Futures Exchange) solicited public opinions on lithium carbonate** and option contracts and related rules. This move also directly shows that lithium carbonate will be listed in the near future, and its mechanism will be more perfect, which is good news for some companies. The industry believes that after the listing of lithium carbonate, it will improve the transparency of spot carbonate, raise the transaction threshold, and accelerate the return of lithium carbonate. What exactly is lithium carbonate?I won't go into detail here, but I'll explain it below. Finally, look at the last stage of lithium carbonate ** this year, that is, the continuous decline period from June to December**. At this time, the reason for not mentioning ** is very similar to the first stageThe main focus is that the increase in terminal demand is not obvious, as well as the increase in lithium carbonate production capacity, and the entire market has downward expectations for lithium carbonate**. On the demand side, the increase in demand for lithium carbonate is mainly concentrated in new energy vehicles and energy storage. However, the development of new energy vehicles has gradually matured, and the growth rate of battery demand has slowed downAt the same time, the demand for lithium carbonate for short-term energy storage is still difficult to compare with that of power batteries, and the demand growth rate is relatively slow. On the supply side, the main domestic lithium carbonate producing areas are concentrated in Jiangxi, Qinghai and Sichuan. Since the beginning of this year, the upstream production of lithium carbonate has continued to advance, and the operating rate in the second half of the year has remained above 70% and increased month-on-month. Overseas, such as Australia's lithium mines, are relatively stable, and at the same time, the overall progress of Chinese-funded enterprises in the development of African lithium mines is relatively fast, and from the perspective of the transportation cycle, they will begin to arrive in Hong Kong around October in the second half of this year. Therefore, when the gap between supply and demand of lithium carbonate continues to narrow, enterprises in the industrial chain are waiting to see the trend and operate with lithium carbonate stably. It was once the consensus reached by the industry to maintain the stability of 150,000 tons of lithium carbonate, but under the current circumstances, it is also difficult for lithium carbonate to hold the 100,000 yuan mark.
How lithium carbonate regulates the market
What is the degree of influence of lithium carbonate on lithium carbonate, first of all, we must first understand what lithium carbonate isStarting Point Lithium will be briefly introduced and analyzed for industry reference. The important reason for the listing of lithium carbonate** and options on the Guangfu Exchange is that in recent years, lithium carbonate** has fluctuated drastically, which has had a significant adverse impact on the "production, sales and storage" business activities of enterprises related to the lithium battery industry chain, and the industry expects to alleviate such problems and promote the healthy and orderly development of the industry. It is reported thatSince December 2021, the Institute has started the research of lithium carbonate**Through subject cooperation, market research, quality mapping, rule demonstration, etc., detailed and in-depth research has been carried out on the spot production and marketing, first-class structure, quality standards, warehousing and transportation of lithium carbonate, and a relatively complete contract rule design has been formed. On July 11, the Guangzhou ** Exchange announced the launch of lithium carbonate ** contracts, option contracts and lithium carbonate** and options business rules, and has been reviewed by the board of directors and reported to the China Securities Regulatory Commission, effective from the date of issuance. At that time, lithium carbonate** stabilized at about 300,000 tons. 
According to the data of the Guangzhou ** Exchange, the trading unit of the lithium carbonate ** contract is 1 ton, the minimum price change is 50 yuan, and the price limit is 4%. The industry believes that the adjustment of lithium carbonate is usually 1000 yuan ton or 500 yuan ton, and the minimum change of 50 yuan ton is relatively more frequent than the spot price adjustment, which can meet the needs of the change in the trading market and will not overly disperse the concentration of trading. The trading unit of the lithium carbonate option contract is 1 lot (1 ton) of lithium carbonate** contract, with a minimum price change of 10 yuan ton, and the price limit is the same as that of the lithium carbonate** contract. The exercise ** covers the settlement price of the underlying lithium carbonate** contract on the previous trading day, which fluctuates up and down by 15 times the ** range corresponding to the price limit of the day. The lithium carbonate option contract adopts a segmented exercise spacing, and when the exercise spacing is in the range of 100,000 yuan tons or less, the exercise spacing is 1,000 yuanWhen the exercise ** is between 100,000 yuan ton and 300,000 yuan ton, the exercise interval is 2,000 yuan ton;When the exercise ** is greater than 300,000 yuan ton, the exercise spacing is 5,000 yuan ton. The exercise method is American: the buyer can apply for exercise during the trading hours of any trading day before the expiration date. In general, ** means that lithium carbonate is first bought and sold in a virtual form, and the actual delivery involves the physical lithium carbonate. Options, also known as options, are the buying and selling rights or options of lithium carbonate**, which are bought or sold at a specified time according to the specified **. At the same time, the trading regulations on lithium carbonate in tons will restrict the entry of speculators to a certain extent and raise the capital access threshold for lithium carbonate. According to the analysis of professionals, the lithium carbonate contract is similar to a "lottery", which fluctuates hugely, and sometimes even achieves multiple increases. Although the previous physical trading of lithium carbonate is omitted from the transaction, the room for operability increases, and the risk is greater. On July 21, the lithium carbonate ** contract was officially listed, including Minmetals Industry Financial Services (Shenzhen)**China International Capital Corporation***CITIC CSI Capital Management***CITIC **Shares*** and other 15 institutions have entered the list of market makers of Guangfu. However, on the first day of trading, after the lithium carbonate ** call auction, the main contract 2401 opened at 238,900 yuan, and within 15 minutes after the opening, the far month contract fell one after another under the condition of low trading volume and open interest. As of the day**, the main contract LC2401 was reported at 21510,000 tons, down 1256%, the remaining 6 contracts all fell to the limit, and even lithium carbonate continued after opening low. The data shows thatAs of December 19**, the main lithium carbonate ** (LC2401) contract**255%, at 99,500 yuan;Lithium carbonate main (LC2402) contract**213% to 99,000 yuan. Some companies said that the listing of lithium carbonate can form a lithium carbonate mechanism, improve the transparency of spot carbonate, and provide the best risk management tools for industrial enterprises. But from a practical point of view, the situation of lithium carbonate ** falling endlessly seems to be unstoppable. On this state of affairs,Some companies carry out lithium carbonate hedging businessto hedge or manage related risks, but many companies have a different attitude. For example, Ganfeng Lithium recently said in response to investor inquiries that the company has not yet carried out hedging business on lithium carbonate ** varieties. It believes that the risk is relatively large, but it does not rule out doing this business in the future. According to the analysis, enterprises in different fields have different levels of demand for hedging business. For example, some upstream enterprises may not have much significance if the cost is not controllable. For mid-range battery companies, when the cost fluctuates greatly, the pressure can be relieved through hedging. In addition, it should be noted that in addition to the company's own shot,In recent days, the Guangzhou Futures Exchange has made frequent moves to adjust the trading limits and handling fees for lithium carbonate ** contracts. Among them, on November 24, the Guangzhou Futures Exchange notified that from the trading time on November 28, 2023, non-** corporate members or customers shall not open more than 10,000 contracts in a single day on each contract of lithium carbonate**. On November 30, the Guangzhou Futures Exchange announced that starting from the trading on December 4, 2023, the intraday closing transaction fee standard of the lithium carbonate**LC2401 contract will be adjusted to 0.8/10,000 of the transaction amount. On December 4, Guangfu announced that starting from the trading on December 6, 2023, the trading fee standard for lithium carbonate**LC2401 contract will be adjusted to 3.2/10,000 of the transaction amount, and the transaction fee standard for intraday closing positions will be adjusted to 3.2/10,000 of the transaction amount. Starting from December 6, 2023, non-corporate members or customers shall not open more than 2,000 contracts in a single day on the lithium carbonate**LC2401 contract. ......Although lithium carbonate ushered in ***, the strength was not large. In the short term, lithium carbonate will stabilize at 100,000 tons, and there will not be much space.
What is the bottom line of lithium carbonate?
It is the consensus of the industry to maintain a reasonable and stable operation of lithium carbonate, and the era of lithium carbonate has passed, but whether it can return to 50,000 tons or even lower in 2021 is difficult to achieve in the short term, and there may be opportunities to achieve it in the long run. The industry judges that the current production cost has begun to challenge the production cost of enterprises, and there is not much room for further decline in the short term. It is understood that the raw materials are different, and the corresponding lithium extraction technology and cost are also different. According to the data, the cost of lithium extraction per ton in salt lake is 40,000-50,000 yuan, the cost per ton of self-owned spodumene mine is about 60,000 yuan, the cost of self-owned lepidolite ore is about 60,000-80,000 yuan, the cost of a single ton of external mining of lepidolite is about 200,000-250,000 yuan, and the cost of a single ton of external mining spodumene is about 300,000-320,000 yuan. But now, with the addition of labor, some production enterprises simply can't cover the cost. In fact, from the perspective of supply and demand, the industry expects that the total amount of lithium carbonate in China will be about 990,000 tons in 2024, and the demand will be about 8790,000 tons, the excess supply and demand is expected to increase to 11350,000 tons. In addition, the continuous release of production capacity in Yichun and other places will continue to increase the excess supply and demand. Some people may say that lithium producers can choose to stop production to survive the low price period, but the fact is that the market opportunity is fleeting, and "shutdown**" may make companies pour faster, optimize production lines and technology, reduce production costs, or lithium salt manufacturers should first consider the problem. In addition, it should be reminded that sodium-ion batteries and hydrogen fuel cells are also gradually encroaching on the application space of lithium batteries in the new energy vehicle and energy storage market. There is no doubt that the development of new energy is long-term, and the market increment of new energy vehicles, energy storage, and electric ships is determined, and the application and development of lithium batteries will inevitably continue to improve, but from the perspective of supply and demand and development cycle, the general trend of lithium carbonate spot is difficult to change. Therefore, in the view of the starting point of lithium battery, after this reshuffle, a new balance of supply and demand will be ushered in, and the competition pattern will be reshaped. From the point of view of time, in 2024, lithium carbonate** will continue to decline on the basis of 100,000 yuan, and the minimum may be around 50,000 yuan, which is basically stable between 5-100,000 yuan. When the phase-out cycle ends and a new cycle begins, lithium carbonate may be. And a new cycle may come in 2025.