Wen Jianghan's visual observation.Once upon a time, lithium carbonate can be described as the popular fried chicken in the market, when lithium carbonate was the most prosperous, it was once known as "white oil" by the market, but just recently, various institutions suddenly had the same view of bearish lithium carbonate, facing the collective bearish of institutions, people can't help but want to ask what happened to this lithium carbonate? How do we see the future market performance of lithium carbonate?
1. Lithium carbonate is collectively bearish by institutions? According to the 21st Century Business Herald, from the current battery grade lithium carbonate 960,000 tons, and about 90,000 yuan of industrial-grade lithium carbonate, which is very close to the lower limit of the fluctuation range given by the annual strategies of various institutions. At the end of the year and the beginning of the year, a number of institutions, including ** companies and ** companies, released the annual strategy of the lithium industry in 2024.
According to the annual supply and demand balance sheet released by various institutions, in 2024, due to the concentrated release of new production capacity and the impact of supply growth being greater than demand growth, the oversupply of the industry will most likely increase further than in 2023.
According to Hongyuan**'s calculations, the total demand for lithium carbonate** and 2023 will be 102 respectively010,000 tons and 98080,000 tons, a slight surplus of about 40,000 tons. And in 2024, the total supply could climb to 147530,000 tons, and the total demand increased to 12270,000 tons, and the current supply growth rate (45%) is also significantly higher than the demand growth rate (25%).
Needless to say, the annual strategies of other institutions basically maintain the above similar predictions, and the differences are in the oversupply results measured by each institution.
According to the current upstream production schedule and downstream demand calculation, the oversupply of spot next year has become a market consensus. "GF's annual strategy points out that the global demand for lithium salt is conservatively estimated to be about 110 in 202450,000 tons (LCE), with an optimistic ** value of about 1.26 million tons, corresponds to 11The surplus of 50,000 tons is 41 under conservative expectations50,000 tons.
According to the report of Jiemian News, as the surplus continues, it is difficult to maintain the upside down of some production lines, and there will inevitably be ineffective production capacity. According to the estimation of China Merchants**, the cost of 10% lithium mineral energy in 2024 will be higher than 950,000 tons, 25% of the lithium ore cost is higher than 630,000 tons, which is also the only core ** support in the downward cycle of lithium prices.
And *** is also a similar point of view, the current oversupply is large, and the reduction in production to boost ** is just "making a wedding dress for others". In this case, the mine's decision to reduce production will mainly be considered from the perspective of its own cost, and it is unlikely that a large-scale production reduction will occur before the cost is broken. In the current market environment of insufficient cash flow of cathode enterprises and the consumption of stock inventory of new energy vehicles before the Spring Festival, the fundamentals are difficult to say good in the short term.
2. Why is the once thriving lithium carbonate so unpopular? Lithium carbonate, as an important industrial raw material, plays an indispensable role in new energy fields such as new energy vehicles and energy storage. In recent years, the market demand for lithium carbonate has risen sharply as the global demand for clean energy continues to grow. However, recent market observations show that lithium carbonate** has experienced significant fluctuations, falling from historical highs to low levels, and even triggered many institutional investors to be bearish.
First of all, the rise of lithium carbonate** is the result of the imbalance between supply and demand in a special environment. In the past few years, with the rapid development of electric vehicles and battery energy storage industry, the demand for lithium carbonate has shown a first-class growth. Since lithium carbonate is one of the key materials for the production of lithium batteries, which are the core components that drive electric vehicles and energy storage devices, the market demand for lithium carbonate is directly affected by the development of these industries.
Lithium carbonate is an important part of lithium battery cathode materials, with the blowout of the new energy vehicle market and the progress of energy storage technology, the market demand for lithium carbonate is unprecedentedly strong, however, in the early stage of this wave of demand boom, due to the long development cycle of new mines, slow release of production capacity and the integration of the industrial chain can not keep up with the growth rate of market demand, the market is in short supply, promoting lithium carbonate ** all the way up, resulting in an imbalance between supply and demand. This situation of short supply has driven the soaring price of lithium carbonate**, which even reached a sky-high price of 500,000 yuan per ton in previous years.
Secondly, the return of lithium carbonate ** is also inevitable in the market. As a key raw material for lithium batteries, lithium carbonate is indeed relatively rich in resource reserves around the world. The main lithium resources on Earth are found in salt lakes and hard rock mines, including the "lithium triangle" regions of South America (Bolivia, Chile and Argentina) and Australia, which have large lithium reserves. With the advancement of technology and driven by market demand, the lithium mining and refining process has been continuously improved and improved, especially the research and development and application of lithium extraction technology from salt lakes, such as precipitation method and solvent extraction method, which has significantly improved the production efficiency and output of lithium carbonate.
At the same time, in the explosive growth stage of the new energy vehicle industry and energy storage market in the past few years, lithium carbonate** soared to a historical high, attracting a large amount of capital to pour into the lithium industry for investment and expansion. However, due to the long production capacity construction cycle, when these investment projects gradually land and form actual production capacity, the market's digestion capacity has not been able to grow with it, especially under the influence of factors such as subsidy policy adjustment and intensified market competition, the growth rate of market demand has slowed down, which eventually led to lithium carbonate exceeding demand and forming a cyclical overcapacity.
Therefore, the problem of lithium carbonate and overcapacity in the current market is due to the favorable conditions of both resources and technology to enable the rapid expansion of the first end; On the other hand, due to the time difference effect between investment decisions and changes in market demand, the superposition of the two directly leads to the disorderly growth of lithium carbonate**.
Third, the current dilemma of lithium carbonate is still the oversupply and continued weak demand. The current low price swing in the lithium carbonate market is indeed mainly due to the problem of cyclical overcapacity. In the early stage of the rapid development of the new energy vehicle and energy storage industry, the demand for lithium carbonate and other lithium products grew rapidly, resulting in a soaring market and attracting a large amount of investment into the field of lithium mining and lithium carbonate production. The construction of these new production capacity has a certain periodicity, when they are put into production, the market volume increases rapidly, and the growth rate of market demand has not kept up.
With the adjustment of subsidy policies, intensified market competition and the uncertainty of global economic growth, the growth rate of the new energy vehicle market has slowed down compared with before, although the overall trend is still up, but it has not achieved an exponential surge as expected. As a result, there is a relative surplus of production capacity that was originally expanded to meet the expected rapid growth.
In addition, the judgment of upstream and downstream enterprises in the industrial chain on the market prospect and inventory management strategy will also affect the market volatility. Once the market expectation weakens or the downstream demand fails to be released as scheduled, the upstream ** merchants may face destocking pressure to further reduce the ** of lithium carbonate.
Fourth, but this low price is not necessarily a bad thing for the new energy market. For the new energy vehicle industry and energy storage and other related industries, the low level of lithium carbonate** has brought a positive impact to a certain extent. On the one hand, the cost of raw materials is one of the important factors that determine the final selling price of products. When lithium carbonate*** is kept at a low level, battery manufacturers are able to source this key ingredient at a lower cost, which in turn reduces the manufacturing cost of power batteries and energy storage batteries.
On the other hand, lower raw material costs will help improve the market competitiveness of new energy vehicles and energy storage products. With the decline in battery costs, OEMs can consider further concessions to consumers, boost market demand through more attractive strategies, and promote the growth of new energy vehicle sales. At the same time, the cost reduction of energy storage system deployment will also help the large-scale promotion of renewable energy projects and promote the development of clean energy.
In addition, the stable low-price environment is conducive to the long-term planning and layout of upstream and downstream enterprises in the industrial chain, avoids the uncertainty risk caused by the violent fluctuation of raw materials, and prompts enterprises to make more stable investment decisions in R&D innovation and capacity expansion.
Therefore, the lithium carbonate market will still face challenges such as oversupply and fierce competition, but the development of new energy vehicles and energy storage will also bring new opportunities to the lithium carbonate market. You may need to see what to say.