Chinese article with Tianqi interview (translation) Continuing...

Chinese article with Tianqi interview (translation) Continuing shortages.
【Xin Dongda Shell cover depth】 Tianqi Lithium answer lithium carbonate supply and demand dynamic situation

Original 2018-01-18 Insufficient supply of raw materials or become the biggest constraint on the development of power batteries, for which industry colleagues have made unremitting efforts.

Review 2017, lithium carbonate prices tight supply, prices continue to rise, both lithium carbonate enterprises, cathode materials companies, power battery companies and even new energy car prices, cross-border listed companies, are trying every means to layout lithium resources, the Australian mine , Canada, the Congo and other global lithium resources are almost divided up. News of expanding lithium carbonate production capacity, mergers and acquisitions or establishing a new lithium carbonate processing enterprise has frequently been reported.

In the meantime, the market for new energy passenger cars has risen. Power battery companies have shown a clear trend of turning to the ternary system for increasing energy density and are rapidly moving toward a high-nickel-ternary system. Lithium carbonate is not suitable for the manufacture of high-nickel ternary cells, and only lithium hydroxide, prompting some lithium product suppliers to step up their efforts to expand battery-grade lithium hydroxide production.

The face of the layout of lithium resources and lithium carbonate / lithium hydroxide production capacity to expand investment, the industry can not help but have several questions: 1, the new increase in many industry participants is not really able to protect the supply of lithium raw materials? 2, it seems that the global lithium resources are being deeply tapped, but what can really form a stable supply?

3, the country has been dependent on ore to mention lithium, salt lake to mention the progress of lithium and a lot of capital investment, can drive the increase in supply? 4, the next 3-5 years, the depth adjustment of the battery industry will drive the upstream lithium industry what kind of changes, the dynamic demand and supply of lithium how to look?

As we all know, Lithium industry in China and the world, Tianqi Lithium occupy an important position, is the undisputed leader. Its judgments on the development of the industry have important reference value. Meanwhile, its own strategic planning, capacity expansion and product pricing mechanism are not only important variables for the development of the upstream lithium industry, but also for the protection of lithium raw materials in downstream materials and batteries.

Jan. 9-10, Tianqi Lithium Industry (002466) answers the questions from investors when answering investors' inquiries, and at the same time, it has a better understanding of Tianqi Lithium, a lithium compound giant. . And see below:

Interpretation of lithium industry trends

1, how do you think of the dynamics of supply and demand in the industry?

Tian Qi Lithium Industry: We believe that in the foreseeable future, the industry will experience a structural change in the depth of the process of change, high-end lithium products such as battery-grade lithium hydroxide and battery-grade lithium carbonate demand will continue to increase, but the supply side is still Shortage, and the price steady rise. We also consider the possible contributions of existing and potential industry participants to capacity changes in the supply side of the industry in the next 3-5 years. To be sure, based on the increasingly fierce market, we think some of the new production capacity will be real There is still a lot of uncertainty regarding the time, quantity and product quality of the release.

2, how to treat the global supply of lithium resources development?

Tian Qi Lithium Industry: I think for a long time in the future, lithium ore and lithium to mention lithium dislocation competition, the coexistence of the development of the situation will continue. We predict that global lithium resource supply will still dominate the market with spodumene ore represented by Australia's Greenbush and resources represented by South America's Salarde Atacama Salt Lake. It will continue to dominate the global market for a long time and the dislocation competition will be clearer.

This mainly takes into account the development conditions of two resources, the maturity of technology and development experience, and the comprehensive advantages of scale, cost and quality. However, due to inherent congenial inconsistency between the two lithium resources, the lithium chemicals produced still have obvious differences in quality. Tianqi use Telitsen lithium concentrate, using one-step production process will be able to directly produce high-quality battery-level lithium chemicals.

3, how to treat Salt Lake to mention the impact of industry supply and demand?

Tian Qi Lithium Industry: Globally, South American salt lake mining, development, mature and reliable, high economy, the major supplier of industrial-grade lithium products, but enjoy the cost advantage compared to ore lithium, is one of the mainstream supply. Salt lake to mention the essence of sustainable development path is the comprehensive utilization of resources.

However, due to the objective conditions (such as the low lithium content in brine, the difficulty of enrichment, the high ratio of magnesium to lithium, the separation of magnesium and lithium is a worldwide problem, Poor natural environment, etc.). Without scientific feasibility analysis, continuous financing ability, accumulation of technology, production and operation, and market cultivation, it is very difficult to build up their own potential in the increasingly differentiated and concentrated megatrends of product competition Sustained competitiveness.

4, other lithium industry participants on the impact of supply and demand in the industry?

Tianqi Lithium Industry: In the world, other types of lithium resources exploration, development and chemical processing, due to the cause of the veins, resource grade, impurity components and process technology path selection, mining and smelting costs, the implementation of environmental standards, Administrative licensing examination and approval, construction period, customer certification and other key factors, the uncertainty is more, the foreseeable future, the possibility of a material impact on the supply side is not obvious.

5, will judge what kind of battery will become the mainstream market?

Tianqi Lithium Industry: From the Chinese government's guidelines for the development of new energy automotive industry planning and lithium battery technology roadmap and the battery technology path of international mainstream markets such as Tesla, BMW and Volkswagen, it gradually entered the high-nickel ternary lithium battery Times of the form has been more clear, with NCA and NCM cathode material for the lithium battery is certainly the mainstream development; and for the main use of lithium carbonate LFP batteries, due to a larger base of needs, a wide range of applications, the expected growth rate in the future is slightly lower In lithium hydroxide, but the number was gradually enlarged trend.

6, how to judge the trend of the future lithium industry? How to treat the future market demand?

Tianqi Lithium Industry: Foreseeable long period of time, electric vehicles on the long-term rigid lithium demand unquestionable, the gradual rise of the field of energy storage industry can not be measured traction, the traditional areas of 3C continued steady growth in demand; the future of at least ten During the year, mainstream lithium batteries, lithium cobalt oxide batteries and multi-type ternary batteries and other mainstream batteries for lithium carbonate, lithium hydroxide application of technology maturity, high market acceptance, substitutability weak; battery level Lithium carbonate and battery-grade lithium hydroxide demand for the rapid growth of the differentiation pattern will become the norm.

However, the improvement of the energy density of lithium batteries and the reduction of costs are not only the focus of the national policy of combing the boxing force, but also the basis of higher sensitivity to price / performance for electric vehicle users in the future. Therefore, we think that the industry's strong will suffer from scarcity of resources and high quality , Advanced and mature technology, product cost and quality of the best and constant.

Tianqi Li all-round understanding of industry

7, Will the company 2018 plan? Plans for the next three years?

Tianqi Lithium Industry: In 2018, the Company mainly relied on technical renovation and expansion of two production bases in Shehong, Sichuan and Zhangjiagang in Jiangsu Province. It is estimated that nearly 40,000 tons of lithium chemical products will be released and their output will be raised by more than 20% over the same period of last year. Among them, the battery-grade lithium carbonate products account for about 80% of the share of lithium hydroxide will be full operation; the other incremental lithium metal, the actual production capacity from the previous 100 tons / year to 600 tons / year. By the end of 2019, the company will produce 110,000 tons / year of Lithium chemical plant equipment at home and abroad, of which nearly 53,000 tons of battery-grade lithium hydroxide and 53,000 tons of battery-grade lithium carbonate.

The proportion of such lithium chemicals production capacity is based on two judgments: 1) The high nickel ternary lithium battery starting with battery-grade lithium hydroxide will gradually become the mainstream of the market demand from 2019. According to Roskill's report on lithium industry development service provider, Annual compound annual growth rate of lithium demand can be maintained at 17.7%, of which annual average growth rate of lithium-ion battery about 47%; 2) the world's high-end production of basic lithium-based chemicals increasingly centralized. The Company's production capacity and gradual climbing process, we plan to reach 100% capacity utilization by 2020.

8, how to plan the development of the company according to the future development of the industry?

Tian Qi Lithium Industry: According to third-party estimates, the global consumption of lithium products by 2026 conservatively estimated demand of 77 million tons / year (lithium carbonate equivalent). The company currently has a clear capacity and the future we expect to occupy a larger market share than the larger gap, which will continue to develop through various means.

9, from the construction of lithium chemical production line to release the production of roughly how long?

Tianqi Lithium Industry: If the production line with ore as raw material is stable and the processing technology is reliable, the production line construction usually takes 24 months and the trial production and production climbing time is usually over 6 months. In addition, obtaining downstream customer certification usually also needs 6 months or longer or even longer.

10, Will the company's future expansion plans are endogenous growth? Is considered the impact of mergers and acquisitions do?

Tian Qi Lithium: Yes, the expansion plans mentioned today are endogenous growth.

11, Will the company's Tibet Salt Lake resources?

Tianqi Lithium Industry: This resource is one of the relatively high-quality resources and reserves of the world's salt lakes, with great potential economic value. Tianqi Lithium is a shareholder of the Salt Lake resources and has been committed to realizing technology through participation in decision- Management synergy.

12, What is the company's future capacity expansion plan is based on what kind of financial estimates? How much lithium price? What is the supporting point for this price assumption?

Tianqi Lithium Industry: The price of lithium products used in our public financial model for the new lithium hydroxide production line in Australia is mainly based on the prices set forth in the 2017 industry report published by Roskill, a world-renowned lithium analysis service provider. Based on this assumption, the Australian Phase II Lithium Hydroxide Project will bring shareholders 27% after-tax internal rate of return. The current average market price of lithium products actually transacted is much higher than this figure, so this is a relatively conservative estimate.

According to public figures, the cost of producing lithium-based chemical products using other lithium mines currently stands at nearly 90,000 yuan per tonne, which will support the price of lithium-based chemical products.

13, how to define the company "high" and "low" lithium products?

Tian Qi Lithium Industry: I personally understand, simply speaking, from the perspective of the value chain, from the downstream end products lithium batteries and electric vehicles are high-end, mainstream customers to judge; from the product point of view, depends on the product cost is whether Competitiveness, look at upstream suppliers of lithium chemical products can continue to meet the mainstream customers personalized product quality, supply stability requirements; In essence, the advanced technology, reliability and product characteristics to judge.

14, I ask the signing of the mechanism with the downstream customers? How to price lithium products?

Tian Qi Lithium Industry: 2018, the company's international customers will be more and more quality, further optimize the customer structure, but also conducive to the company's product prices become more stable and international companies. There are several considerations for the pricing of lithium products. First, there are differences in the prices of lithium products in domestic and foreign markets. Secondly, the prices depend on the balance between supply and demand in the market. In addition, they depend on the specific business conditions.

15, may I ask the company to purchase the cost of lithium concentrate?

Tian Qi Lithium Industry: Talisen lithium concentrate is currently priced once a year, Thailissan will consider the price changes in the lithium market trends.

16, May the company recently with the GAM litigation progress? Are there plans to do the financial budget?

Tian Qi Li industry: At present the progress of the proceedings of both parties in the normal, controlled advance. The staged conclusion is that based on the Telitsen's full knowledge and years of mining experience at the Greenbush mine, as well as the Green Resources lithium reserves, based on the advice of the Australian legal counsel hired by the company and Telisen, pursuant to the Lithium Business Sale Agreement, "Keeping the Mining Rights Agreement", Telisen this expansion does not require prior written consent of GAM. The dispute is the continuation of the continuous exchange between the two parties on the content of the relevant agreements and will not affect the current mining production and business activities and will not materially affect the implementation of the chemical grade lithium concentrate expansion plan.

17, the company Suining project progress?

Tian Qi Lithium industry: the company has a clear timetable, in the first quarter of 2018 to complete the feasibility study report, environmental assessment, project project, and strive to start construction in the second quarter.

18, I ask why the company chose to build production bases in foreign countries?

Tianqi Lithium Industry: To build a factory in Australia, the factory mainly meets the individualized needs of overseas high-quality customers. The factory also complies with the requirements of mainstream clients for internationalization, construction and operation with high standards. Therefore, the one-time capital investment is relatively high. However, There is a clear advantage. One is that it is close to lithium resources. The other is that there are ample supply of local production factors, running costs and logistics costs. Thirdly, Australia has comparative advantages in safety, environmental protection, legal system, occupational health and personnel management. After the overall assessment, choose to build a production base in Australia.

19. How much capital investment will the company need for each ton of production increase?

Tianqi Lithium Industry: The Company invested a total of 398 million Australian dollars (equivalent to 2.024 billion yuan) in the first 24,000 tons of lithium hydroxide project in Australia, 320 million Australian dollars (equivalent to 1.628 billion yuan) in the second 24,000 tons lithium hydroxide project, The lower investment is due to sharing some of the infrastructure.

20, 2018 2019 will the company's capital investment?

Tianqi Lithium Industry: In accordance with the existing plan for the expansion of specific capacity, the past two years the company in order to achieve additional chemical production capacity, the cumulative need of more than 5 billion yuan investment. In this regard, the company is supported by its own adequate operating cash flow and diversified funding facilities. This "5 billion yuan" investment, excluding the capital investment involved in the expansion of Thaleson, is an independently run, well-run, well-funded business entity that can be financed separately and with powerful hematopoiesis.

21, may I ask the company gross margin higher than the industry's reasons?

Tian Qi Lithium industry: three factors: First, the company's customer structure to high-quality core customers; second is the company mature lithium mining, development costs are relatively reasonable; Third, based on the company's product mix, we produce higher value-added Battery-grade lithium chemical products, which is more prone to premium.

22, Will the company's biggest competitive advantage?

Tian Qi Lithium Industry: First of all, in essence, the company's real core is the talent team, the key is the leader, the company's actual controller's vision, realm and pattern.

From the commercial value point of view, Tianqi has a unique resource reserve and development advantages, such as having unique Telitsen Lithium resources, which has two outstanding advantages, one belongs to its own mines, mines mining experience is mature, and is open Mining and operation with high efficiency and cost advantage; secondly, the ore grade is high (the average grade is 2.4%), and the impurity content is small, which can ensure the sustained and high-quality output of lithium products in the midstream; meanwhile, Infinite wealth.
https://mp.weixin.qq.com/s/n5ksWLhUoRxjrpYi6In5qw