Re: Good news & Bad news, page-41

From - 8horse

Everbright Securities forecast spodumeneconcentrate price could reach USD$2,300/ton.

As of August 18, the average price of spodumeneconcentrate was US$875/ton.

Everbright Securities: Lithiumore VS iron ore is better.
Everbright Securities08-16



Spodumene is a high-quality lithium resource

Lithium resources include salt lakes, mica, andspodumene. Among them, spodumene has the strongest element content and theleast impurity content. In the foreseeable 3-5 years, spodumene will bereplaced by other lithium resources in high-nickel ternary materials. Thepossibility that high-nickel ternary materials are mainly used to producehigh-end new energy vehicles is expected to further increase the proportion ofglobal high-end new energy vehicle production in the next 3-5 years. This alsomeans that spodumene The increase in demand will exceed the average level oflithium resources.

Spodumene and iron ore are important minerals intwo eras respectively

About 60% of the terminal demand for iron ore is realestateHe Infrastructure, during 2000-2019, fixedasset investment drives China’s GDPto grow by 460%, and the real estateinfrastructure industry chain has ushered in a boom in commodities. One of themost beneficial minerals is iron ore; among many materials, The terminal demandfor lithium is concentrated in new energy vehicles, which will reach 54% in2020. Driven by a good product experience and a dual-carbon policy, spodumenewill usher in great development in the era of new energy vehicles.

The supply structure of spodumene is very similarto that of iron ore

(1) In the country distribution of production andreserves, lithium resources are more concentrated than iron ore: In 2020,Australia and South America (Chile, Argentina, Brazil) will contribute 75% ofglobal lithium resource reserves and 80% of production, and contribute toglobal iron 48% of mineral resource reserves and 55% of production; (2) Interms of concentration, the global production CR4 of lithium resources and ironore is between 44%-47%; (3) Exploration of spodumene and iron ore The miningcycle is relatively long.

The growth in demand for spodumene far exceedsthat of iron ore two decades ago

(1) During the period 2000-2019, global andChinese iron ore demand increased by 123% and 518%, respectively. The newlystarted area of Chinese real estate , an important terminal downstream of ironore, increased by 668%. During 2020-2039, lithium resources The global newenergy vehicle output is expected to increase by 20 times; (2) In terms ofalternatives, iron ore was basically not affected by scrap during 2000-2019;and spodumene is widely used due to its good product consistency. For high-endnew energy vehicles, with the increasing volume of high-end new energy vehiclesand high-nickel ternary batteries in the future, we estimate that the proportionof spodumene in the production of lithium resources is expected to increasefrom 51% in 2020 to 56% in 2025; (3) ) In 2019, China's external dependence onlithium resources and iron ore was 74% and 80%, respectively, which arerelatively close in general.

The cost curve of lithium ore is steeper, and itis not ruled out that the price of spodumene concentrate will rise toUS$2,300/ton in the future.

(1) The cost curve of lithium ore is steeper, andthe same increase in demand can bring a greater increase in the price ofspodumene. (2) According to the cost curve of iron ore and the situation ofsupply and demand, it is not ruled out that the price of spodumene concentratewill rise to US$2,300/ton in the future, which is a 179% increase from theprice on August 4, 2021.