Deutche Bank Reserach
Lithium prices showgreen shoots after EV sales lift in September
Ourrecenttrip through China highlighted the potential forlithium carbonate pricing support into Q4 on i) a lift in auto sales into theend of the year, ii) a reduction in salt lake production in the Qinghaiprovince and iii) reduced output by high cost lepidolite converters andmarginal spodumene producers. Since Monday this week, we have seen two priceincreases: 1) in 99% lithium carbonate to RMB 70,000/t / USD$10,070/t (Figure3) and 2) in 99.5% lithium carbonate to RMB 80,000/t / US$11,509/t (Figure 4). Whilethe gains are encouraging we expect to see strong EV sales continuing tosupport lithium demand until the end of the year (for more details see latest EvisionPlug 5, page 8). We have BUYS on Orocobre (PTA$6.50/sh) and SQM (US$56/sh).
EV sales lift intoSeptember, DB estimates look easily within reach
ChineseEV sales have generally been supported in Q4 and the September numbers appearencouraging so far (figures 1 and 2). Our battery conference in Chinahighlighted many recent industry trends and the support for the industry togrow both inside China and beyond. We forecast 2018EV sales within China of 884k units, to date 612kunits have been sold and with 121k units sold in September our target appearseasily achievable.
