Summary: In June 2015, CCM found that the
undersupply of battery grade lithium carbonate in the spot market boosted its
price. CCM predicted that, as the strong demand from the downstream industry
continued subsequently, along with the constant influence of the weather on the
supply of raw materials, the price of battery grade lithium carbonate would
keep rising in China.
Source: Bing
In June 2015, CCM communicated with the
salespersons from domestic lithium carbonate enterprises and found that, as the
strong demand from the downstream industry continued subsequently, along with
the constant influence of the weather disaster on the supply of main raw
materials, undersupply of industry grade and battery grade lithium carbonate
appeared in the spot market and the price was boosted to high level.
Specifically, at the end of May 2015, Jiangxi Ganfeng Lithium Co., Ltd., one of
the major producers in China, even further raised the lithium carbonate price:
Industry grade lithium carbonate: by
USD326.76/t (RMB2,000/t) to USD7,352.10/t (RMB45,000/t)
Battery grade lithium carbonate: by
USD816.90/t (RMB5,000/t) to USD8,985.90/t (RMB55,000/t).
CCM believes that the price of battery
grade lithium carbonate will keep rising in China in the future. The specific
reasons are as follows:
- Upward demand for alternative energy
vehicle drives the development of Li-ion battery industry chain
According to data from the Ministry of
Industry and Information Technology of the People's Republic of China, the
shipment of alternative energy vehicle in China in the first 5 months of 2015
was 53,600, increasing by about 3 times YoY. On the basis of data from the
Lithium Branch, China Nonferrous Metals Industry Association, the average price
of battery grade lithium carbonate in May rose by approximately 10% over that
in April.
As one of the 10 key development fields in
Made in China 2025, the alternative energy vehicle industry will receive key
support from the government. With policy guidance, CCM predicted that, the
alternative energy vehicle industry will turn into explosive growth in 2015.
Relevant upstream Li-ion battery industry chain, such as battery grade lithium
carbonate, power Li-ion battery, Li-ion battery equipment and electric
machinery, will benefit the most. Considering the current situation, the
explosive growth of Li-ion battery industry has been brought by the rapid
development of the alternative energy vehicle industry. With the upward demand
for alternative energy vehicle in the future, the price of battery grade
lithium carbonate will be further boosted in China.
- El Nino constantly and severely impacts
the supply in main lithium ore producing areas
Recently, the meteorological organizations
of many countries confirmed the impact of El Nino on daily living and
production. In terms of lithium ore, the reserves of lithium resources in
Bolivia, Chile and Argentina, located in South America and known as Lithium
Triangle, respectively account for 50%, 25% and 10% of the global figure. The
world lithium giant enterprises, including SQM Corporate (SQM), Rockwood
Holdings, Inc., FMC Corporation (FMC) and Orocobre Limited are situated here.
However, the temperature keeps rising due to El Nino. The rainfall in South
America may increase dramatically and cause the flood again. Thus, the supply
of lithium carbonate will be impacted.
Early at the end of March 2015, a flood
attacked Chile. The local supply and circulation of lithium resources were
influenced distinctly. SQM, the world's largest lithium carbonate manufacturer,
suspended the production in Chile and predicted that its 2015 output of lithium
resources would decrease by about 20% YoY. FMC, another lithium giant player,
also stated that relevant production facilities and transportation were
damaged. Lithium resources were in short supply.
Therefore, at present, lithium carbonate
has been rounded up in the international market. The price of lithium carbonate
is raised. Undersupply remains in the spot market. Influenced by the constant
upward price of lithium carbonate in the international market, the price of
lithium carbonate will go up further in China.
About CCM:
CCM is the leading market intelligence
provider for China’s agriculture, chemicals, food & ingredients and life
science markets. Founded in 2001, CCM offers a range of data and content
solutions, from price and trade data to industry newsletters and customized
market research reports. Our clients include Monsanto, DuPont, Shell, Bayer,
and Syngenta. CCM is a brand of Kcomber Inc.
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