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    002460   CNE100000SF6

GANFENG LITHIUM CO., LTD.

(002460)
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Surge in electric vehicle sales power lithium prices as shortages loom

09/13/2021 | 09:35am EDT
FILE PHOTO: A electric car charging station is pictured in a parking lot in Shanghai

LONDON (Reuters) - Lithium prices have jumped to their highest in more than three years thanks to an upsurge in electric vehicle sales, depleting stocks of the battery material in top consumer China.

Targets to cut carbon emissions from China to the United States cannot be met without the rechargeable lithium-ion batteries that power electric vehicles.

"Right now it's very simple: the market is so tight that players are fiercely competing for any spot tonnage available," said Max Deudon, a trader at Transamine in Geneva.

More investment in lithium production is needed to meet future needs of the electric vehicle supply chain, analysts say.

"Things are heating up and there is huge anxiety about where lithium supply is going to come from in the near future," said Benchmark Mineral Intelligence analyst George Miller.

"If new lithium doesn't start coming to market, we might start to see electric vehicle production rates hamstrung by a lack of raw material supply."

Electric vehicle batteries can use lithium carbonate or lithium hydroxide, but the industry typically talks of volumes in lithium carbonate equivalent (LCE).

Graphic: Second charge: https://fingfx.thomsonreuters.com/gfx/ce/zjvqkjqaxvx/2ndcharge.JPG

Spot prices for lithium carbonate in China have climbed 170% so far this year to 142,000 yuan ($22,000) a tonne, their highest since April 2018. Prices of spodumene, a source of lithium mainly mined in Australia, have climbed 144% this year to $990 a tonne.

In China, the biggest market for electric vehicles, lithium carbonate output in August rose 19% year-on-year to almost 20,000 tonnes, state-backed research house Antaike said.

Demand for lithium is expected to jump 26.1% or about 100,000 tonnes of LCE to a total of 450,000 tonnes, flipping the market into a deficit of 10,000 tonnes, according to Benchmark Mineral Intelligence.

Graphic: Lithium deficit: https://fingfx.thomsonreuters.com/gfx/ce/zgvombmabvd/lithiumdeficit.JPG

Global sales of electric vehicles were up 150% in the seven months to July to just over 3 million units, compared to the same period in 2020, with about 1.3 million sold in China, according to consultancy Rho Motion.

Graphic: EV sales: https://fingfx.thomsonreuters.com/gfx/ce/akpezqzeavr/electricvehiclesales.JPG

For 2021, Rho Motion expects electric vehicle sales to reach 5.8 million.

Higher prices have boosted the fortunes of miners with profits at Albemarle, Pilbara Minerals, Ganfeng and Tianqi Lithium soaring and share prices rising.

Graphic: Lithium miners: https://fingfx.thomsonreuters.com/gfx/ce/jnpweyejepw/lithiumminers.JPG

(Reporting by Zandi Shabalala, additional reporting by Tom Daly, editing by Pratima Desai and David Evans)

By Zandi Shabalala


ę Reuters 2021
Stocks mentioned in the article
ChangeLast1st jan.
GANFENG LITHIUM CO., LTD. 1.00% 172.5 End-of-day quote.70.45%
PILBARA MINERALS LIMITED 8.13% 2.26 End-of-day quote.159.77%
TIANQI LITHIUM CORPORATION 2.44% 99.8 End-of-day quote.154.14%
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Analyst Recommendations on GANFENG LITHIUM CO., LTD.
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Financials
Sales 2021 10 614 M 1 663 M 1 663 M
Net income 2021 2 500 M 392 M 392 M
Net Debt 2021 3 257 M 510 M 510 M
P/E ratio 2021 92,2x
Yield 2021 0,36%
Capitalization 235 B 36 744 M 36 750 M
EV / Sales 2021 22,4x
EV / Sales 2022 15,8x
Nbr of Employees 5 533
Free-Float 52,3%
Chart GANFENG LITHIUM CO., LTD.
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Ganfeng Lithium Co., Ltd. Technical Analysis Chart | 002460 | CNE100000SF6 | MarketScreener
Technical analysis trends GANFENG LITHIUM CO., LTD.
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Income Statement Evolution
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Mean consensus BUY
Number of Analysts 19
Last Close Price 172,50 CNY
Average target price 215,92 CNY
Spread / Average Target 25,2%
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Managers and Directors
Liang Bin Li Chairman & President
Man Ying Yang Chief Financial Officer & Vice President
Hua'an Huang Chairman-Supervisory Board
Jun Liu Independent Non-Executive Director
Sze Wing Wong Independent Non-Executive Director
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