After the price surge last year, the price of lithium carbonate has begun to fall this year. Since the end of June, the price of lithium carbonate has continued to fall. On August 31, the average price of battery-grade lithium carbonate in Shanghai Nonferrous Metals Network has dropped to 88,000 yuan / ton, down about 48.2% from the beginning of the year.
However, in the first half of the year, the revenues and profits of companies such as Tianqi Lithium and Yanfeng Lithium, the major domestic producers of lithium carbonate materials, did not fall, and sales and gross profit margins increased year-on-year.
Lithium carbonate company's performance profit rebounded year on year
The semi-annual report released by Tianqi Lithium Industry recently showed that due to the sales volume and price increase of lithium products, the operating income in the first half of the year was 3.289 billion yuan, a year-on-year increase of 36.24%; the net profit was 1.309 billion yuan, a year-on-year increase. 41.71%.
In the first half of the year, Tianqi Lithium's lithium concentrate sales revenue increased by 23.32% compared with the same period of the previous year, and the gross profit margin increased by 3.29 percentage points; the sales revenue of lithium compounds and their derivatives increased by 44.4% compared with the same period of last year. Gross profit margin increased by 4.62 percentage points.
Lithium giant Lifeng Liye also achieved its peak performance in the first half of the year, with revenue of 2.332 billion yuan, up 43.47% year-on-year; net profit of 837 million yuan, up 37.82% year-on-year.
Among them, deep processing lithium compound business revenue increased by 27.34%, gross profit margin increased by 4.67 percentage points year-on-year; metal lithium series products revenue increased by 69.89%, gross profit margin increased by 17.79 percentage points.
Another lithium mining company, Yahua Group, achieved revenue of 1.364 billion yuan in the first half of the year, up 32.73% year-on-year; net profit was 153 million yuan, up 21.16% year-on-year. Among them, the lithium industry achieved a net profit of 25 million yuan, an increase of 74.45%.
In fact, since the beginning of 2015, benefiting from the increase in demand for lithium batteries brought by the state subsidized electric vehicle industry, the price of lithium carbonate has climbed from more than 40,000 yuan at that time to 170,000 yuan at the end of 2017. Since the beginning of this year, the subsidy has declined and the market share has been squeezed by lithium hydroxide. The price of lithium carbonate has dropped to about 125,000 yuan/ton at the end of June.
Since the end of June, the price of lithium carbonate has been falling. On August 31, the average price of battery-grade lithium carbonate in Shanghai Nonferrous Metals Network has dropped to 88,000 yuan / ton, down about 48.2% from the beginning of the year.
At present, the decline in lithium prices has not yet had an impact on the performance of lithium mining companies.
Multiple layouts to expand lithium carbonate extraction efficiency
In order to lay out the upstream lithium resources, Tianqi Lithium will acquire a 24% stake in Chile Mining Chemicals (SQM) for US$4.1 billion. Last week, the company issued a H-share prospectus and plans to land H-shares to raise funds for the acquisition.
Tianqi Lithium will also expand the Thaleson Green Bush mine in Australia to increase lithium concentrate production capacity. The second and third chemical grade lithium concentrate plants in the mine are under construction and are expected to be put into production in mid-2019 and fourth quarter 2020, respectively. The two plants will increase the annual production of the Greenbush mine to approximately 1.95 million tons and continue to have the lowest chemical grade lithium concentrate production costs.
Tianqi Lithium said that after the completion of the expansion project, it will provide continuous and sufficient raw material guarantee for the company's domestic and overseas lithium salt projects, enhance the company's market supply capacity and share, thereby improving profitability and consolidating the company's global lithium mining industry. leadership.
Tianqi Lithium is also planning the lithium compound market and plans to expand the lithium metal production capacity of the Chongqing Tongliang plant to take advantage of the future development opportunities of solid lithium batteries and other downstream applications of lithium metal.
On August 14, Haofeng Lithium announced that Yanfeng International, a wholly-owned subsidiary of Yanfeng Lithium, plans to invest in the Netherlands to establish a wholly-owned subsidiary, Dutch Fengfeng, and the company will acquire it at a price of US$60.3 million. A 37.5% stake in Argentina's Minera Exar.
In the midstream of the industry chain, the continuous expansion of lithium salt processing capacity has established the industry's leading position in the industry. In 2017, lithium carbonate production ranked fourth in the world, accounting for 10% of global production capacity; lithium hydroxide production ranked third and first in the world and China respectively, accounting for 11% of global production capacity; lithium metal production ranked first in the world, accounting for the world 47% of production capacity.
On the other hand, the domestic salt lake brine lithium extraction company is also carrying out active technical research and speeding up the expansion of production capacity.
Qinghai salt lake brine lithium reserves account for about 80% of the country, accounting for about 26% of global reserves. Due to low grade and high magnesium to lithium ratio, development and utilization is extremely difficult. According to Salt Lake, its holding subsidiary, Lanke Lithium, has overcome the technical problem of extracting lithium from high-magnesium-lithium than salt lake brine.
In the first half of the year, Lanke Lithium produced 5,329 tons of lithium carbonate, an increase of 129.4% over the same period of last year, and sales of 3949.5 tons, an increase of 78.47% over the same period last year.
Qinghai Salt Lake BYD Resources Development Co., Ltd., another subsidiary of Salt Lake, is planning to build a battery-grade lithium carbonate project with an annual output of 30,000 tons/year. Lanke Lithium will also expand its 20,000-ton/year battery-grade lithium carbonate project. In the future, the annual production capacity of lithium carbonate in Salt Lake will reach 60,000 tons.
Editor's comment: The reasons are mainly reflected in two aspects. First, in terms of cost control, this year, while the lithium salt is falling, the price of lithium ore has also decreased, resulting in lower costs; in addition, in the production of lithium salt production line, The increase in line upgrade capacity has resulted in a smaller amount of unit amortization.
Second, in the market, although the power battery market is relatively sluggish for SMEs this year, the production capacity has begun to appear highly concentrated. The demand for lithium carbonate has increased due to the expansion of capacity of large battery manufacturers such as CATL.
