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Lithium is known as "industrial monosodium glutamate" by the industry, is the lightest metal in nature, because lithium has the highest standard oxidation potential of various elements, so it has a wide range of application prospects in the field of batteries and energy. China's lithium resources exist in the form of salt lake brine, spodumene and lepidolite, most of which are stored in salt lakes.

The upstream of the electric vehicle is the lithium battery, and the upstream of the lithium battery is the battery grade lithium salt, and the upstream of the lithium salt is the lithium ore. Lithium salt is battery grade lithium carbonate and battery lithium hydroxide, lithium ore is divided into spodumene and salt lake brine, to develop electric vehicles, we must master the upstream lithium ore. The lithium used in the battery industry is mainly concentrated in positive electrode materials, electrolyte and lithium additives, etc., in 2021, the global production of positive electrode materials is about 1.32 million tons, an increase of 75%, and the demand expansion of the downstream battery industry has stimulated the consumption market of lithium salt.

China Lithium Grid data show that the average price of China's battery grade lithium carbonate market has risen 10 times in the past two years. Some analysis indicates that the market supply is still tight in the short term, and the price of lithium salt is expected to remain prosperous.

Lithium salt industry market operation situation

Global lithium production in 2021 will be only 100,000 tons. However, reserves are not equal to production, subject to various factors such as infrastructure, natural environment, mining technology, etc. At present, lithium ore is mainly produced in Australia.

From the perspective of supply and demand, since August 2020, the rapid expansion of power battery demand under the background of relatively rigid supply and the outbreak of energy storage demand have pushed the price of lithium salt to continue to rise, and battery-grade lithium carbonate has risen to 560,000 yuan/ton. Under the rising price of lithium salt, the world has also opened the road to capacity expansion.

Among them, major lithium resource producing areas such as Australia, South America Lithium Triangle, China and Africa Greenland mine have become the most capacity expansion areas. Australia, South America, China mining technology and infrastructure are relatively stable, becoming the main stable production areas, but Africa has great potential to contribute to the increase.

In terms of reserves, China's proven lithium reserves account for about 6% of the world's total, ranking sixth. Among them, the lithium in salt lake brine and underground brine accounts for about 85%, and the ore resources account for about 15%, mainly distributed in Qinghai, Tibet, Xinjiang, Sichuan, Jiangxi, Hunan and other provinces and regions. Among them, Tibet and Qinghai are salt lake brine types, and solid lithium deposits are mainly distributed in Sichuan (mainly spodumene), Xinjiang, Jiangxi (mainly lepomica) and other places.

In terms of salt lake lithium, it is mainly distributed around Qarhan Salt Lake, Dongtai Kiner Salt Lake, Xitai Kiner Salt Lake and Zabye Salt Lake in Qinghai-Tibet region, including Zangge Mining, Tibet Mining, Salt Lake Shares and Minmetals Salt Lake and other enterprises have been cut into mature production lines, among which Salt Lake shares have most of the mining rights of Qarhan Salt Lake, which has the largest reserves. It is expected to become the main producing area of lithium * in domestic salt lakes in the future, contributing to the main lithium increment.

Lithium salt industry investment prospects forecast

Lithium, known as "industrial monosodium glutamate" and "white oil", is widely used in traditional industries such as chemical industry, high-end manufacturing fields (aircraft, rockets, etc.), new energy industry (electric vehicles) and nuclear power field (uranium reactor fission), at present, many countries have classified it as a strategic mineral or key mineral. Battery is the most widely used field of lithium resources, the new energy industry is booming under the wave of the green era, driving the power battery and its upstream lithium industry demand rapid outbreak, ushering in a big era of lithium.

In recent years, the rapid development of emerging industries such as electric vehicles, landscape energy storage, and electronic products has led the rapid development of the lithium salt industry, and the demand structure of lithium salt has switched from the traditional medicine and ceramic glass industries to the growth industry represented by lithium-ion batteries, and the battery field has become the main scene of downstream applications of lithium salt. The high price of lithium salt has become an important factor for the substantial pre-increase in the performance of lithium salt companies.

After entering November, Qinghai salt lake lithium salt production will be reduced, and the end of this year and the beginning of next year new cathode material production capacity before the stock demand pull up, and the end of the new energy vehicle impulse is expected to expand lithium salt demand, is expected in the context of tight supply and demand, lithium salt prices will remain high, lithium industry performance still has the momentum of growth.

The lithium used in the battery industry is mainly concentrated in positive electrode materials, electrolyte and lithium additives, etc., in 2021, the global production of positive electrode materials is about 1.32 million tons, an increase of 75%, and the demand expansion of the downstream battery industry has stimulated the consumption market of lithium salt. Driven by the rapid growth of new energy vehicles and energy storage applications, the subsequent market is still expected to continue high global lithium salt consumption, and the market is forecast to reach 980,000 tons of LCE in 2023.

The new energy vehicle industry is booming, and the global electrification trend is accelerating. Under the background of carbon neutrality and carbon peak and policy support, new energy vehicles, as an important part of the construction of a clean energy system, have become the focus of development in various countries. The downstream demand of the lithium industry has ushered in an outbreak, the policy end and the demand end continue to exert force, the demand resonance of China, the United States and Europe, and the penetration rate of new energy vehicles will rapidly increase in the context of the green era. Power batteries and energy storage lithium in various countries have entered a stage of rapid growth, driving lithium demand in the next five years compound annual growth rate or 35%, the established trend to support the long-term and rapid development of the lithium industry.

Lithium prices have also fluctuated wildly since 2015. In the past 7 years, the downstream demand outbreak, contraction and upstream lithium resource expansion, production reduction of long-term peak, supply and demand mismatch led to the lithium salt price cyclical volatility, industry participants have a strong risk management and hedge insurance × demand, the need for the launch of futures tools to help enterprises, industry development. The launch of overseas lithium hydroxide futures conforms to the current era background of accelerating development of the new energy automobile industry year by year and amplifying price fluctuations of the lithium salt market, and has strong potential.