锂行业发展趋势回顾与展望：2020年Fastmarkets全球锂供给与市场峰会

sC h i n a L i t h i u m S u p p l y & D e m a n d D y n a m i c sMinmetalsSecurities ResearchJingwen SunAnalystsunjingwen@wkzq.com.cnSAC Reg. No: S0950519050001F a s t m a r k e t sL i t h i u m S u p p l y & M a r k e t s 2 0 2 0Equity Research 2020/10/26Nonferrous Metals SectorRatingsNEUTRAL 珍惜有限创造无限Contents目录01030204The darkest hour has passed, modest recovery on the wayLithium Supply: divergence happensLithium Demand: a new cycle backed by competitive products and favorable policies globallyWhat kind of lithium supply is expected by the green energy downstream in the future mass adoption?2 珍惜有限创造无限Exhibit 1: An overview of global lithium chemical market 2015-2020YTD(USD/t)Sources: Asian Metal, Trade Statistics, MinmetalsSecurities Research1. The darkest hour has passed, modest recovery on the wayIncentivisedOEMs were themain driver of lithium demand & priceCathodes & Batteries’ aggressive capacity expansiondrove demand and price high, along with stock-addingBattery markets reshuffled. The main driver returned to OEMs.Demandsupported by competitive productsSupplyDemandShortage of spodumene concentrateShortage of effective converting capacityHydroxide possesses premium, but is narrowing305,00010,00015,00020,00025,00030,0002015/012015/032015/052015/072015/092015/112016/012016/032016/052016/072016/092016/112017/012017/032017/052017/072017/092017/112018/012018/032018/052018/072018/092018/112019/012019/032019/052019/072019/092019/112020/012020/032020/052020/072020/09Lithium Carbonate, CIF EULithium Hydroxide, CIF EUIndustrial Li Carb, China, VAT incl.Battery Li Carb, China, VAT incl.Industrial LiOH, China, VAT incl.Battery LiOH, China, VAT incl.South Korea Li Carb imports Avg.South Korea LiOH imports Avg. 珍惜有限创造无限When the cycle trending downwards, it is the brine producers who determine the bottom of lithium chemical pricesWhen the cycle trending upwards, it is the non-integrated hard-rock convertors who determine the reasonable price levelCurrent price is unsustainable as it broke the all-in cost and even reached the cash cost of 2ndtier brine producersSecond 20H1, especially 20Q4, demand expansion supports lithium chemical spot market towards recovery Exhibit 2: Lithium carbonate costcurve in 2019 (Non-integrated, incl. royalties)Exhibit 3: Lithium carbonatecostcurvein 2019 (Integrated, incl. royalties)Sources: Company data, MinmetalsSecurities Research estimatesSources: Company data, MinmetalsSecurities Research estimates1. The darkest hour has passed, modest recovery on the way​ABCDEFGHIJKLMNOPQRS0100002000030000400005000060000700000918273645546372819099108117126135144153162171180189198207216225234243252261270279288297306315324333342351360369378387Lithium carbonate unit production cost（RMB/t）Cumulative lithium production in 2019, LCERed：BrineBlue：Hard-rockAnnual average price of technicalgradelithium carbonate 36.6k yuan/ton(before tax)Annual average price of BG lithium carbonate 43.9k yuan/ton(before tax)​ABCDEFGHIJKLMNOPQRS0100002000030000400005000060000700000918273645546372819099108117126135144153162171180189198207216225234243252261270279288297306315324333342351360369378387Lithium carbonate unit production cost（RMB/t）Cumulative lithium production in 2019, LCERed：BrineBlue：Hard-rockAnnual average price of technical grade lithium carbonate 36.6k yuan/ton(before tax)Annual average price of BG lithium carbonate 43.9k yuan/ton(before tax)4 珍惜有限创造无限Exhibit 4: Lithium chemical capacities in China continue to expand (ktons, LCE)Exhibit 5: WA miners’ spodumnestocks declined (dmt, Talison’sdata not included)Sources: Company data, MinmetalsSecurities Research2.1 Status of Mine, Chemical, and StocksMine: typical signs of bottoming, however most were voluntary supply cuts, few truly quitted or squeezed outChemical: aggressive capacity expansion continued in 2018-2020YTD, capacity utilization rates diverging significantlyStocks: most spodumene stocks are in the hands of leading converters and new entrants, chemical is also de-stockingDisruption of Covid-19: Hard-rock supply chain proved resilient, SA brines’ expansion progress at risks2. Lithium Supply: divergence happensSources: Company data, MinmetalsSecurities Research estimates5 - 50,000 100,000 150,000 200,000 250,000 300,00017Q117Q217Q317Q418Q118Q218Q318Q419Q119Q219Q319Q420Q120Q2WA Lithium Concentrate Production, dmtWA Lithium Concentrate Sales, dmtEst. WA Lithium Concentrate Stocks, dmt02004006008001000120020162017201820192020E2021E2022E2023ESpodumene ConversionBrine processingLepidolite ConversionPurification/Recycling 珍惜有限创造无限Exhibit 6: Estimates for lithium hard-rock capacities expansion globally, 2009-2025 (tons, LCE),Sources: Company data,MinmetalsSecurities Research estimates010000020000030000040000050000060000070000080000020092010201120122013201420152016201720182019E2020E2021E2022E2023E2024E2025EGlobal Hard-rock Lithium Capacity Estimates 2009-2025 (tons, LCE) Jiangxi-YichunJiangxi-He YuanAba-MaerkangAba-Maerkang Dang BaGan