Mine Shutdown Drives Up Lithium Carbonate Prices

According to the commodity market analysis system: starting from the 11th, the price of lithium carbonate has surged. As of August 12th, the benchmark price of battery-grade lithium carbonate in China is 75,733 CNY/ton, up 20.28% month-over-month and down 13.58% year-over-year; the benchmark price of industrial-grade lithium carbonate is 74,166 CNY/ton, up 19.95% month-over-month and down 12.75% year-over-year.

Ning Wang mining area in China has suspended production, and lithium carbonate futures have hit the upper limit.

On July 7, the Yichun Natural Resources Bureau of China issued a notice, requiring eight lithium-related mining companies to complete the preparation of mineral resource verification reports for the change of mineral types by September 30, involving eight enterprises. On August 9, CATL's Jiangxi Jianxiaowo mine area suspended operations due to the expiration of the mining rights license, and the suspension may last for more than three months. Upon the release of this news, the market reacted strongly, with the main contract of lithium carbonate futures LC2511 hitting the upper limit on August 11, reaching 81,000 CNY per ton, a price increase of 8%. Currently, apart from the expiration of the mining license for the porcelain clay mine in CATL's Jianxiaowo mine area, the mining licenses for the other seven mines will not expire until after 2027. During the period of renewal of the mining rights licenses, it is less likely that all the mines will be completely shut down.

In the short term, the suspension of production at CATL's mines has impacted China's lepidolite supply. However, from a supply structure perspective, salt lake production has not been directly affected, and overseas imports also provide additional supply.

Demand Side: New Energy Vehicles See Strong Demand Even in Off-Season, Structural Growth in Energy Storage Demand

Resilience of new energy vehicle demand:

In July, China's new energy passenger vehicle wholesale sales reached 1.18 million units, a year-on-year increase of 25%, and a month-on-month decrease of 4%, in line with seasonal characteristics. At the policy level, the purchase tax exemption and trade-in policies for new energy vehicles have been extended to next year, and it is expected that demand will maintain steady growth in the second half of the year. However, there is a risk of "peak season not being peak," and if production in August and September falls short of expectations, it may suppress the upward space for prices.

In the short term, large-scale energy storage project tenders are strongly driven by policies, but household energy storage growth has slowed due to insufficient economic viability. In the long term, sodium-ion batteries may gradually replace some lithium demand in the energy storage sector; however, currently sodium-ion battery costs remain higher than lithium batteries (0.5 yuan/Wh vs 0.32 yuan/Wh), and it will still take time before they can achieve large-scale replacement.

A lithium carbonate data analyst believes that recently, the price of lithium carbonate has been relatively strong due to supply disruptions, but in the medium term, attention should be paid to the release of additional overseas supply and the verification of demand.