The order closure volume exceeded 860k lots! The collective surge in lithium extraction from salt lakes concept stocks, Sichuan Energy Power hit the daily limit straight away.

How does supply-side disturbance drive continuous strength in lithium prices?

On April 2nd, the concept stocks related to salt lake lithium extraction collectively moved sharply, with Sichuan Energy Power hitting the daily limit-up at 16.97 yuan per share, with buy orders once exceeding 860k lots. As of 10:46, Tibet Mining also hit the daily limit-up, and multiple concept stocks such as Wandes, Tibet Urban Investment, Wanbonda, and Ganfeng Lithium followed suit with gains.

From the news perspective, the main contract for lithium carbonate at the Shanghai Futures Exchange returned to 160k yuan per ton, reaching 161,320 yuan/ton at 10:42 on April 2nd, up over 1%.

Northeast Securities stated that the ongoing strength in lithium is supported by multiple factors.

First, supply-side disturbances are intensifying. The re-issuance and restart of mining licenses in Jiangxi continue to be delayed, negotiations in Zimbabwe are not progressing smoothly, leading to continued export restrictions, and the risk of diesel inventory shortages in Australia may affect subsequent mine production. Considering the impact of shipping schedules, raw ore supplies domestically may face disruption starting in late April.

Second, demand has exceeded expectations, further supported by the logic of renewable energy substitution amid high oil prices. Although domestic vehicle sales in the first quarter showed negative growth, the increase in electric power per vehicle fully offset this. Additionally, performance of heavy trucks and exports remains strong. Under the sustained high international oil prices, the penetration rate of new energy vehicles is expected to further increase, and the economic benefits of photovoltaic and storage are becoming more apparent, potentially leading to long-term demand growth exceeding expectations.

Moreover, Northeast Securities believes that the performance of lithium mining companies in Q1 and Q2 will continue to be realized, and the profit and valuation of the lithium mining sector are expected to see a DCF (discounted cash flow) double upgrade.

In terms of strategy, Anliang Futures suggests that “the fundamentals of low inventory and strong expectations support short-term price strength. Key focus should be on the recovery of Zimbabwean supply and the revival of new energy vehicle demand by the end of April. Investors are advised to wait for opportunities to buy on dips or breakouts.”

(Note: The content of this article is for reference only and does not constitute investment advice. Investors operate at their own risk.)