International Lithium Resource Dark Battle Continues, High-priced Lithium Hurts Downstream Battery Factories

- Jan 11, 2020-

Since the Chilean mining and chemical industry entered the bureau 20 years ago, international lithium products have entered the era of oligopoly. After the outbreak of lithium-ion batteries, the international oligarchs continue to fight against battery-level lithium carbonate. Almost at the same time as lithium carbonate skyrocketed, the cooperation between Tianqi Lithium and Thaleson's other shareholder, American Yabao, gradually came out of the honeymoon period, and the two parties began to plan their own capacity building.

Under the pattern of international lithium resources with three brines and one ore, Tianqi Lithium has indirectly held 51% of the world's largest lithium ore company Thalyssen, which has an immediate impact on the market. On January 8th, the first announcement of Tianqi Lithium's New Year made the industry look forward to for a long time, but it was not the semi-annual pricing of Telisen that was waiting for it.

Many industry insiders have quite similar predictions for the price of lithium carbonate, which will increase in the first half of 2016. Only in the next half of the year, the price of upstream capacity release may stabilize. However, it is not easy to release the capacity of battery-grade lithium carbonate. Most domestic and foreign manufacturers had previously planned to release the production capacity in 2015, and most of them failed to achieve it. There are still doubts about whether they can be successfully put into production in 2016 and gain market recognition.

Lithium prices continue to skyrocket, and many battery manufacturers may not reach the end of (2016). Mo Ke, chief analyst of True Lithium Research, is quite concerned about the continued hotness of battery grade lithium carbonate in 2016. Driven by the effects of battery-grade lithium carbonate, not only lithium chemical products have gone up, most battery materials have also followed suit. The era of high-priced lithium has just begun, and some companies have felt real injuries.

International oligarchy

I ignored you yesterday, and tomorrow you can't afford it. The industry's ridicule for the soaring price of battery-level lithium carbonate was quite helpless.

As early as mid-2015, expectations of lithium carbonate prices rising soon have been very strong, one of the important reasons is the limited production capacity of several international oligarchs. The international lithium ore giant FMC has raised prices worldwide since October 1, 2015. Its lithium carbonate, lithium chloride, lithium hydroxide and other products have increased prices by 15%, which has opened the domestic lithium carbonate price model. Not to be missed.

In fact, the three major lithium giants have monopolized more than 60% of the global lithium carbonate supply for many years. At present, the global supply of lithium carbonate resources is mainly controlled by giants such as SQM, Albemarle, FMC, and Thaleson. Data show that from 1998 to 2009, the average annual price of lithium carbonate increased to more than three times, which is due to the growth in global demand for lithium products, and also due to the market dominance of the giant lithium carbonate.

Whether it is lithium extraction from salt lakes or lithium mining, the pace of domestic development has always fallen short of expectations, so that the outbreak of lithium carbonate demand in recent years is still constrained by imported lithium ore. Since Tianqi Lithium purchased a 51% stake in Thalyssen in 2013, domestic companies have indirectly entered the lithium resource giant club.

An important reason for this round of soaring lithium carbonate prices seems to have been ignored, that is, a number of domestic and foreign lithium carbonate projects that were originally expected to be put into production in 2015 have not been on schedule. In the eyes of the industry, on the one hand, there are technical and force majeure factors, and on the other hand, it is also because the oligarchs tend to slowly release output to maintain stable and moderate growth in product prices.

Even Tianli Lithium and Thaleson controlled by Yabao in the United States have not fully released their mining capacity.

As two shareholders of the world's largest lithium mine, Tianqi Lithium and Albemarle of the United States have parted ways in the deep processing of lithium concentrates as early as the end of 2015. After spending the honeymoon period with international giants, Tianqi Lithium's control of Thaleson seems more and more subtle. As of now, the pricing of Thaleson's fixed production that was originally determined semi-annually has not yet been released.

The era of high-priced lithium is coming?

In the face of skyrocketing lithium carbonate prices, Tianqi Lithium seems rather cold. There is also a hidden battle with international giants behind it. Albemarle has begun to purchase raw materials from Thaleson in 2015 and carry out processing and production in China, thereby expanding its voice in the Chinese market.