High nickel batteries open up the price of lithium hydroxide 'upward channel'

Market data shows that as of May 19, the average price of domestic battery-grade lithium hydroxide was 88,500 per ton, a cumulative increase of 9% in May, and it has continued to increase for 21 weeks as of last week. As the core raw material of high-nickel cathode materials, the reason why the price of lithium hydroxide has risen all the way is important: on the one hand, overseas new energy vehicles have exploded, driving the export demand for high-nickel power lithium batteries, and the upstream price of spodumene has also stabilized at high temperatures. International mainstream car companies have importantly deployed high-nickel battery technology routes, and downstream battery factories have increased their production expansion speeds, and the market demand for high-nickel materials has further increased. Europe sold 506,600 new energy vehicles from January to April, of which 130,000 new energy passenger vehicles were sold in April, a year-on-year increase of 440%. As a result, domestic exports of power lithium batteries and high-nickel materials were stimulated. In the first quarter, my country's lithium hydroxide exports increased by 56% year-on-year. CATL reported over 2.5 billion yuan in export value of power lithium batteries in 2021Q1, a year-on-year increase of 28.7 times. Last year, the installed capacity of high-nickel batteries accounted for more than 20%. On the other hand, the price of lithium iron phosphate cathode materials has risen by 45.8% compared with the same period last year, and its cost advantage compared with ternary materials has been shrinking. The price of high-nickel ternary cathode materials has only increased by 5.4% compared with the same period last year, and demand is strong. The industry’s judgment is that from the supplier’s quotations, it is expected that the actual transaction price in May will continue to rise compared to this month’s price center, and the overall price gap with lithium carbonate will be gradually repaired. By the peak demand season in the second half of this year, the supply of lithium hydroxide is likely to remain tight. Driven by the European and American markets in 2021, global production and sales of new energy vehicles will achieve a leap-forward increase. By then, the global dynamic demand for battery-grade lithium hydroxide will increase as much as 70,000 tons, and the cumulative demand increase will reach 130,000-140,000 tons in 2020-2022. Lithium hydroxide will enter two years of tight supply.