1. The concept and classification of lithium carbonate
● The concept of lithium carbonate
Lithium carbonate is an inorganic compound, colorless monoclinic crystal, slightly soluble in water and dilute acid, insoluble in ethanol and acetone. Lithium carbonate is used as a raw material for ceramics, glass, ferrite, etc., and components are sprayed with silver paste, and medically used to treat mental depression. Lithium is known as an important element that drives the world, and as the global demand for clean energy rises, lithium plays an increasingly important role in the market.
● Classification of lithium carbonate
Lithium carbonate can be divided into industrial grade lithium carbonate and battery grade lithium carbonate. The content of industrial grade lithium carbonate is 99%, which can be used as ceramic glaze, special glass, semiconductor materials, etc. Lithium carbonate can also be used in cement admixtures to promote coagulation. The content of battery-grade lithium carbonate is 99.5%, and many battery-grade lithium carbonate companies layout it in lithium batteries.
2. Lithium carbonate industry chain
● Industrial chain
The upstream of the lithium carbonate industry chain is the collection of raw materials, which are mainly divided into lithium mines and salt lakes, and are made into industrial-grade lithium carbonate. The midstream of the lithium carbonate industry is made of lithium hydroxide as a lubricant, which is ultimately used in mechanical devices in the downstream industry; battery-grade lithium carbonate is made into lithium batteries for electronic consumption in the downstream industry. Lithium hydride is made into lithium single alloy and used in automobile, aviation and military industries in downstream industries. Finally, high-purity lithium carbonate is directly used in chemical, glass, pharmaceutical, etc. downstream industries.
● Downstream industry of lithium carbonate in China
According to statistics, new energy in China's lithium carbonate downstream industry market accounts for the largest proportion, accounting for 49%. China's lithium carbonate is mainly used for lithium batteries of new energy vehicles, accounting for 24% of electronic consumption battery such as drone battery and so on. Including lithium batteries of various electrical appliances, the third is the traditional industry with 17%, energy storage accounts for 6% such as kayak battery, and exports account for 3%.
3. Status Quo of China's lithium carbonate industry
● Lithium carbonate production in China
In 2017, China's lithium carbonate output was 83,000 tons, and until 2021, China's lithium carbonate output was 240,000 tons, a year-on-year increase of 40.68%. Lithium carbonate is an important material for making lithium batteries. In recent years, with China's introduction of clean energy policies, the status of lithium carbonate has become more and more important, so the output of lithium carbonate will continue to rise in the future. In the first half of 2022, China's lithium carbonate output will be 157,000 tons. The new energy vehicle industry is the largest downstream application market for lithium carbonate, driving demand growth.
Lithium carbonate is the most important product in lithium compounds and is the positive electrode material for making lithium batteries. At present, the largest downstream application market of lithium carbonate in China is the field of new energy vehicles, accounting for nearly half. In recent years, driven by policies and markets, new energy vehicles have grown rapidly, bringing a broad new market to lithium batteries. As an important raw material for lithium batteries, lithium carbonate is not only used in the field of new energy vehicles, but also in the field of electronic consumption, accounting for 25%.
● China's lithium carbonate import and export
According to the data of China Customs, China's lithium carbonate imports have always been greater than its exports. China's new national policy to support new energy has led to an increase in the demand for lithium carbonate in the Chinese market, resulting in an increase in imports. In 2015, China imported 110,500 tons of lithium carbonate and exported 15,800 tons. In 2021, China imported 810,100 tons of lithium carbonate and exported 78,400 tons. China's technology for refining lithium carbonate has gradually matured. In the first half of 2022, China imported 713,200 tons of lithium carbonate and exported 50,600 tons.
● Lithium carbonate price in Chinese market
The strong market demand for lithium carbonate drives the price to rise rapidly. From 2016 to 2022, the price of lithium carbonate in China showed an overall upward trend, but it fell sharply from 2018 to 2020. In 2020, the price of lithium carbonate in China will drop to 41,665.27 yuan / ton, which is about 70% lower than that in 2017, mainly caused by the imbalance between supply and demand. In the past few years, the explosive growth of the new energy vehicle market has driven the production and sales of power batteries to increase significantly.
The supply of battery-grade lithium carbonate is in short supply, the price has been rising all the way, and the production capacity of a large number of lithium carbonate projects has been released in a concentrated manner. As a result, the price of lithium carbonate has fallen, especially in 2020, when the epidemic caused factories to shut down, demand growth was slow, and prices fell to low values. However, after the epidemic is brought under control in 2021, the vitality of the market economy will recover, demand will pick up, and prices will show an upward trend. In May 2022, the price of lithium carbonate fell slightly to 453,454.55 RMB / ton, but this was only temporary. Then in June, the price of lithium carbonate rebounded and continued to rise in July.
● Lithium carbonate market size in China
According to data, China's lithium carbonate has grown rapidly since 2019, and the market size in 2019 reached 69.96 RMB. China's introduction of energy-saving and emission-reduction policies, which is in line with new energy vehicles, has led to a rapid increase in demand for lithium carbonate and lithium batteries. In the first half of 2021, China's lithium carbonate market has reached 12.566 billion RMB.
4. Competitive landscape of lithium carbonate market in China
Tianqi accounted for 13% of the lithium carbonate market in China, Shengxin Lithium accounted for 9%, Lake Lithium accounted for 9%, Nanshi Lithium accounted for 8%, Ganfeng accounted for 7%, and other companies accounted for 54%. It can be seen that the leading China's lithium carbonate companies is Tianqi. As a leading company in China's lithium carbonate industry, Tianqi's operating income has been increasing in recent years. In 2016, Tianqi's total revenue was 2.436 billion RMB.
In 2021, the total operating income of Tianqi will be 3.778 billion RMB, a year-on-year increase of 5.18%. The company has developed well and occupies a certain weight in China's lithium carbonate industry. In 2020, Tianqi's output of lithium carbonate was 1,150 tons, and in the first half of 2022, Tianqi's output was 28,033 tons. Tianqi's business focused on lithium carbonate, and its output grew rapidly. Tianqi's production in 2021 will be 1,972 tons, a year-on-year increase of 71.48%.
5. The future development trend of lithium carbonate in China
As a giant in new energy, lithium carbonate has been highly valued by China. The tight supply and demand of China's lithium carbonate industry, and the soaring prices have attracted the attention of the Chinese government, moderately speed up the development and investment of China's lithium resources, and crack down on unfair competition that drives up prices. To a certain extent, the situation of China's lithium carbonate price overflow has been eased. Lithium carbonate production enterprises in China are limited by technology and raw materials, their production capacity is low, and their output cannot keep up with demand, resulting in a situation of short supply.
In the future, the industry also needs to accelerate the development of China's lithium carbonate industry, ensure the development of lithium carbonate, and further improve the utilization rate of resources. The continuous development of new energy vehicles drives the demand for lithium carbonate to continue to expand. On the one hand, due to the impact of the epidemic, in order to stimulate the recovery of social and economic vitality, China has extended the subsidy policy for new energy vehicles until the end of 2022. At the same time, with China's carbon peaking and carbon neutrality goals, the market for new energy vehicles will continue to expand.
On the other hand, international oil prices have risen in recent years, especially in early 2022, due to the impact of the Russian-Ukrainian war, international oil prices have soared, and gasoline prices in China once rose to over 10 RMB per liter. The cost of buying and using fuel vehicles for many car consumers has risen, and the public has gradually begun to favor new energy vehicles. In addition, consumers who purchased new energy vehicles in the early stage also need to replace their car batteries, which will bring a certain increase in demand for the lithium battery market.
Benefiting from the dual carbon goals and related policies, the rapid development of the new energy vehicle industry has also significantly driven the demand for lithium carbonate. In the future, the global new energy vehicles are expected to continue the high growth trend, which will significantly drive the demand for lithium carbonate, and will also drive the significant growth in the supply of lithium carbonate.