The Market Concentration Of 'lithium'has Been Further Deepened

- Sep 22, 2017-

The supply of lithium carbonate has been strained since the explosion of China's new energy vehicle market in 2015.According to statistics from China nonferrous metals industry association, the supply and demand gap of lithium carbonate in China was 1.73 million tons in 2015.The 2016 gap is 1.32 million tons, with the shortfall expected to be about 14,000 tons this year.The current situation of the supply and demand tight industry has led to the high price of lithium carbonate.

Relatively stable in the first half of this year, market price of lithium carbonate, after entering the second quarter, new energy market began to heat up, incremental market rising, drive the upstream materials rapidly increasing market demand, price of lithium carbonate new round of growth.

In the four key materials of power battery, the positive electrode material is the most sensitive to the market and the price is the most unstable. The fundamental reason is that the supply channel is unstable, the channel is single and the industrial chain is weak.On the one hand, the domestic lithium mineral endowment is poor, not easy to exploit, and the low level of its processing technology leads to very low resource utilization;On the other hand, the external dependence of lithium mineral resources is too high.

According to the survey data, basic lithium - salt products, including lithium carbonate, are currently produced in China and nearly 76 percent of imported raw materials such as lithium pyroxene and concentrate and concentrated brine.

Obviously, the current lithium industry base is weak, and the current situation of supply and demand imbalance is very difficult to reverse in a short time.With the rapid development of the new energy vehicle market, the market demand for lithium carbonate will further increase.

In the empty warehouse in jiangxi province, wang bin, deputy director of the lithium salt factory in jiangxi province, said, "today's production is that the stock is here and it's all gone the next day.Another day together LiYe LiYe bibcock also faces zero inventory situation, its shot hong base Liu Jun warehouse manager said: "the conventional products in inventory, basically there is no inventory, is produced went away."

The situation of other lithium - salt producers can be imagined.With the supply and demand imbalance of the lithium carbonate market deepening further, the small and medium-sized enterprises will face more severe tests and the market concentration will be further deepened.

Mainly reflected in: first, lithium salt, small and medium enterprises do not have the ability to layout the upstream lithium, on the one hand, basic by large domestic high-quality lithium lithium salt and each big power battery enterprises dominated, poor endowment of lithium small and medium-sized enterprises lack of technical support, also do not have economic benefits;On the other hand, it is the best choice for the domestic lithium - salt enterprises to arrange the overseas high quality lithium deposits, and the small and medium-sized enterprises also do not have the overseas strength.

Secondly, it is difficult for the small and medium - sized lithium - salt manufacturers to cope with the rising trend of raw material prices.However, the leading lithium salt manufacturers can consolidate supply channels and stabilize raw material prices through the layout of overseas and binding customers, and the cost advantage is further strengthened by the scale effect.

Jiangxi feng LiYe liang-bin chairman said: "before the next July, we have a production capacity of forty thousand tons is released, we can achieve 2019 nearly one hundred thousand tons of production capacity, capacity than they are now basically are three times over."The leading enterprises are expanding their production, while small and medium-sized enterprises are suffering from the lack of supply channels to expand their production. Even if the expansion is realized, profits are extremely limited, and the market concentration of lithium in the future will continue to deepen.