The Zhitong Finance App learned that as of March 21, 2024, Huafu Securities released a research report saying that as of March 21, 2024, the price of battery-grade lithium carbonate was 112,600 yuan/ton, up 13.1% from the beginning of the month and 16.2% from the beginning of the year; the price of battery-grade lithium hydroxide was 105,200 yuan/ton, up 12.6% from the beginning of the month and 12.8% from the beginning of the year. In the short term, demand is still being replenished. Lithium prices are bottoming out, and the medium- to long-term excess trend is not changing. Lithium prices are peaking. Focus on the April cathode production schedule. The peak season may drive a rebound in lithium prices. However, the 2024 surplus situation has not changed, and it is still necessary to rebalance supply and demand through a sharp drop in lithium prices. As one of the best strategic assets in the electric vehicle/energy storage industry chain, the high growth of the lithium industry in the lithium battery era has not changed. It is recommended to focus on strategic layout opportunities for lithium ore stocks.

Individual stocks suggest focusing on: Tianqi Lithium (002466.SZ), Salt Lake (000792.SZ), Zangge Mining (000408.SZ), Ganfeng Lithium (002460.SZ), Yongxing Materials (002756.SZ); Jiangte Electric (002176.SZ), China Mining (002738.SZ), Tibet Mining (000762.SZ), Rongjie (002192.SZ).

The main views of Huafu Securities are as follows:

Lithium mine: 26,600 tons of LCE were imported in February, -52% month-on-month and -8% year-on-year. Among them, Australia's 13,000 tons of LCE was -64% month-on-month and -51% year-on-year. In January-February, a total of 82,000 tons of LCE equivalent lithium ore were imported, +192,000 tons of LCE/ +30% year-on-year. In February, Australia's Port Hedland lithium exports to China were -16% month-on-month, but the cumulative export volume in January-February was +23%; in January-February, imports of Australian ore were -50% year-on-year due to low prices, but continued release in Africa led to imports of +26,000 tons of LCE/ +1734% month-on-month.

Lithium carbonate: 43,600 tons were supplied in February, -16% month-on-month and +14% year-on-year. Among them, 33,000 tons were domestically produced, -23% month-on-month; 12,000 tons were imported, +11% month-on-month, of which 90,000 tons were imported from Chile, or +0.30,000 tons month-on-month. The cumulative supply in January-February was 96,000 tons, +14,000 tons/ +17% year on year. Among them, 74,000 tons were domestically produced, +12,000 tons/ +19% year on year; 22,000 tons were imported, +0.05 million tons/ +2% year on year.

Recycling plants and outsourced lithium salt plants continued to cut production due to inversion, and large factories increased vacations and maintenance due to low lithium prices. Chile exported 161,000 tons of lithium salt to China in February, and imports are expected to increase dramatically in March and April; environmental issues will have little impact on large manufacturers, and domestic lithium carbonate will also increase significantly against the backdrop of market recovery and sufficient mineral resources.

Lithium hydroxide: 0.92 million tons were supplied in February, -15% month-on-month and -26% year-on-year. Among them, 18,200 tons were domestically produced, -5% month-on-month and -20% year-on-year; 90,000 tons were exported, -3% month-on-month, and -13% year-on-year.

The cumulative supply in January-February was 2.0 tons, -0.2,800 tons/ -12% year on year. Among them, 37,000 tons were domestically produced, -0.53 million tons/ -12% year on year; 18,000 tons were exported, -0.18 thousand tons/ -9% year on year. In February, pre-order expectations and domestic demand were still poor, and export volume also weakened.

Cathode and hexafluoride: Production in February was 174,700 tons (lithium iron 11.3+lithium ternary 4.5+lithium cobalt 0.3+lithium manganese 0.5+hexafluoride 0.7), -10% month-on-month and +24% year-on-year. Among them, 113,000 tons of lithium iron, -10% month-on-month and +49% year-on-year. In January-February, a total of 368,000 tons were produced, +108,000 tons/ +42% year-on-year. Among them, 238,000 tons of lithium iron was +98,000 tons/ +70% year-on-year. With the gradual restoration of mobile storage terminals in March, production schedules improved markedly.

Lithium supply and demand: There was a slight shortage of 0.12 million tons of lithium salt in February. Among them, the supply was 51,800 tons, -16% month-on-month, mainly due to price inversion; demand was 52,900 tons, -9% month-on-month, mainly due to pre-order orders in February and holiday maintenance. There was a cumulative surplus of 0.2,700 tons in January-February, of which the supply was 114,000 tons, +11,000 tons/ +11% year on year; demand was 111,000 tons, +26,000 tons/ +31% year on year.

Lithium price: As of March 21, 2024, the price of battery-grade lithium carbonate was 112,600 yuan/ton, up 13.1% from the beginning of the month and 16.2% from the beginning of the year; the price of battery-grade lithium hydroxide was 105,200 yuan/ton, up 12.6% from the beginning of the month and 12.8% from the beginning of the year; the price of spodumene concentrate was 1,079 US dollars/ton, up 13.8% from the beginning of the month, down 17.9% from the beginning of the year. January and February are the traditional low season for the lithium market. The supply side often cut production due to inverted lithium prices, and Salt Lake cut production seasonally; some February orders on the demand side were put forward to January, and production stoppages increased due to the market downturn. Production schedules increased sharply from month to month in March. Inventory replenishment led to tight market supplies. Some overseas mining companies cut production more than expected, and lithium prices rebounded during the peak season.

Risk warning: Demand for electric vehicles fell short of expectations; the release of resource-side projects exceeded expectations.