A股锂矿板块早盘领涨，天齐锂业、威领股份、永杉锂业纷纷涨停，赣锋锂业涨超7%。UBS expects that the suspension of lithium business in Jiangxi during the Ningde Era will reduce China's monthly lithium carbonate production by 8%, and lithium prices are expected to rise by 11%-23% during the year, which will be supported at 8,600 US dollars/ton.
On the morning of Wednesday, September 11, UBS Sky Han and others released the research report “China's lithium prices have bottomed out”, saying that according to internal sources, Ningde Times decided to suspend its lepidomite business in Jiangxi on September 10.
After the news broke, the main contract for lithium carbonate futures on the Guangzhou Stock Exchange rose more than 7% in the intraday session today. By the midday close, it had risen 5.85% to 7,6950 yuan/ton.
The A-share lithium sector led the way in early trading. Tianqi Lithium, Weiling, and Yongshan Lithium rose and stopped, and Ganfeng Lithium rose more than 7%.
According to the report's previous analysis, the cash cost of Ningde Era lithium business is approximately 10,968 US dollars (excluding tax) or 89,000 yuan (tax included) per ton. According to data from Shanghai Nonferrous Metals Network (SMM), the spot price of lithium carbonate has been below the cost line of the Ningde era since mid-July 2024.
This means that the lithium business in the Ningde era has been losing money for two consecutive months. The report said:
We previously felt that the Ningde Era might be less sensitive to losses in the lithium business because they are more concerned about the overall profit of the battery business. However, in the context of two consecutive months of losses in the lithium business and the fact that lithium prices are still falling under pressure, we have finally seen that producers with higher costs have begun to reduce supply normally.
UBS said that the suspension of lithium business in Jiangxi during the Ningde era will reduce China's monthly lithium carbonate production by 8%, which is equivalent to a monthly reduction of 5000-6000 tons of lithium carbonate equivalent (LCE), which will benefit lithium prices in the long term against the backdrop of a trend in balance between supply and demand in the market.
The report predicts that lithium prices are expected to have 11%-23% upward room during the year, and lithium prices will be supported at 8,600 US dollars/ton (approximately RMB 61,183 per ton).
According to UBS's analysis of the 2024 global cash cost curve, in the long run, lithium prices are expected to be supported at 9,909 US dollars/ton (about 70,496 yuan/ton) and peak at 10,968 US dollars/ton (approximately RMB 7,8030 per ton), because the Ningde era may resume its lithium business when lithium prices rise to this level.
