Lithium miners' profits are soaring

With the price of lithium electric materials rising all the way in 2022, many lithium mining companies have made a lot of money, and most of the profits of the industrial chain have been divided.

Recently, the upstream and downstream industries of the lithium battery industry chain have released financial data for 2022. In general, with the price of lithium electric materials rising all the way in 2022, many lithium mining companies will make a lot of money and share the majority of profits in the industrial chain. "Where does lithium go" continue to stay in the industrial chain.

Profits of upstream and downstream mining companies soared

News reporters found that lithium mining companies in 2019 sales performance into the overall harvest. Among them, Tianqi Lithium achieved operating revenue of 40.449 billion yuan last year, an increase of 427.82%; Net profit of 24.125 billion yuan, year-on-year growth of 10.6 times, stable profit "leading leader". In addition, in 2022, the gross profit margin of lithium chemical products sales of Tianqi lithium was as high as 85.85%, which increased by 23.96% compared to the same period, again ranking in the forefront of the industry.

Ganfeng Lithium and Rongjie share the same eye-catching performance. Ganfeng Lithium achieved revenue of 41.823 billion yuan in 2022, an increase of 274.68% year on year; Net profit was 20.504 billion yuan, up 292.16% year on year. In terms of profit margin, the main lithium products achieved 56.11%, an increase of 8.35% year-on-year.

Rongjie Shares achieved operating revenue of 2.992 billion yuan, a year-on-year growth of 225.05%; Net profit was 2.44 billion yuan, up 3,472.94% year on year. In addition, the sales performance of Shengxin Lithium Energy, Tianhua New Energy and other upstream customers of the industrial chain also increased significantly.

The sales performance of the lithium company is closely related to the industry development. Ganfeng Lithium said that in 2022, the company's lithium salt commodity sales price has increased significantly compared with 2021, and the company's lithium battery sector production capacity has been released quickly, resulting in a significant increase in sales. Tianqi Lithium indicates that its main business income increases significantly due to the positive conditions such as the improvement of the global economy of new energy vehicles, the acceleration of production capacity expansion of lithium battery producers, and the improvement of the order information of positive battery materials in the middle and downstream. In 2022, the sales volume and average price of the company's key lithium products will increase significantly compared with that of 2021.

In terms of quarters, Tianqi Lithium's net profit in the third quarter of 2022 was 5.654 billion yuan, down 19.23% from the previous quarter, while its net profit in the fourth quarter of 2022 was 8.143 billion yuan, up 44.03% from the previous quarter, which is generally in line with the lithium price of last year. According to statistics, the price of battery grade lithium carbonate has soared to more than 600 thousand yuan/ton in the middle and late November 2022.

The sector is making steady progress

It is noteworthy that in recent years, battery grade lithium carbonate price wind frequency gene mutation. Shanghai Steel Union data shows that on April 4, the average spot trading price of battery grade lithium carbonate fell by more than 8,500 yuan/ton to more than 224,000 yuan/ton, a total decline of about 57% compared with the beginning of the year, and a decline of about 62% compared with the historical maximum price in November 2022, causing a high concern in the sales market. Analysts point out that there is uncertainty over whether lithium mining companies can maintain high profit growth in 2023 as lithium prices fall sharply.

In general, last year lithium industry chain profit overall focus point show shift development trend. With the further decline of raw material prices, the profit division of the industrial chain is expected to be further alleviated this year. "The raw material reduction is good for the middle and downstream battery manufacturers, the raw material companies, and the industry as a whole, because the cost is coming down. "But for upstream and downstream mining companies, especially those who buy iron ore at auction at sky-high prices, there is a risk of losing money." China battery industry Research Institute Wu Hui said.

In view of the continuously falling lithium price, Tianqi Lithium also said that because of the strong regularity of the lithium industry, the price of lithium chemical products has risen to a record high and shown a downward trend in the third quarter of 2020 so far. From 2023, the acute shortage of lithium supply and demand in the world will gradually ease, and the growth rate of lithium demand is expected to slow down, but still maintain a relatively high nerve center. According to the forecast analysis of the law of supply and demand balance, the distribution of lithium chemical raw materials supply is relatively scarce, which is expected to be alleviated, and the price of lithium chemical products may have a certain decline.

Tianqi Lithium has also recently expressed its confidence in sustainable development on an exchange platform. "Although the lithium price has periodic price fluctuations risk, but the following terminal equipment, especially the new energy vehicles and energy storage industry in the future high growth forecast, related policies skewed is objective reality and can be reasonably expected, so from the middle and long term, the company believes that the lithium industry stock fundamentals will be stable in the near future."

Speed up capacity expansion

"The regularity of mineral resources is strong, mining will involve the level of capital construction, the cycle time is particularly long, it is difficult to supply in the downstream suddenly surge order requirements. When the demand is great, some mineral resources are marketable even at very high prices. But once requirements are lowered, some capacity may be eliminated." An employee told reporters, "The price, with the gradual improvement of the power battery recycling sales market, there will be a decline in indoor space."

But with lithium prices falling, the company's enthusiasm for production has not dissipated. For future development plans, several companies indicated that they will continue to accelerate capacity expansion.

"In the next five years, under the premise of making full use of the current production capacity and characteristics, we will continue to expand upstream and downstream high-quality lithium resources, expand the production capacity of lithium chemical raw materials, and expand the collaboration between the middle and downstream industrial chain. Oriented by the use of electric vehicles and energy storage technology, we will actively connect the upper, middle and lower reaches and strive to become an added value technological innovation enterprise." Tianqi Lithium vice chairman Jiang Sinuo said at the recent performance presentation.

Ganfeng Lithium also recently announced that the company signed a strategic cooperation framework agreement with the Xilin Gol League Administration Office, and they will work together to build the new energy industry chain of lithium electricity in Xilin Gol League. The signing of this cooperation contract is committed to giving full play to each other's respective advantages and working hand in hand to create the whole industrial chain of lithium resource recycling, including lithium resource exploration and exploitation design, lithium battery materials, new lithium battery and new energy technology, which is beneficial to ensure the supply of lithium resources of the company, expand the business scale of the company's lithium salt and lithium battery products, and improve the reasonable layout of the company's industrial chain. Enhance the company's competitive advantage and profitability, in line with the company's upper, middle and downstream integration strategy.