Core Insights - The A-share market opened slightly lower on November 19, with the ChiNext New Energy ETF Huaxia (159368) experiencing a peak increase of 0.72% before retreating [1] - A seminar on the cost research of lithium iron phosphate materials highlighted the industry's challenges, including an 80.2% price drop since 2022 and over 36 months of continuous losses [1] - Citic Securities forecasts a strong demand for lithium carbonate, indicating a monthly supply shortage of approximately 1.3 million tons, with expectations for a price increase across the lithium battery supply chain [1] Group 1: Market Performance - The ChiNext New Energy ETF Huaxia (159368) recorded a transaction volume exceeding 45.85 million yuan, leading among similar funds [1] - Key stocks such as Xingyuan Material and Hunan Youneng rose over 2%, while Ningde Times and Yiwei Lithium Energy increased by more than 1% [1] Group 2: Industry Insights - The seminar emphasized the importance of lithium iron phosphate in supporting the lithium battery supply chain and proposed strategies for cost reduction through collaborative procurement and process optimization [1] - The industry is moving towards high-pressure dense lithium iron phosphate innovations to enhance quality and reduce costs [1] Group 3: Future Outlook - Citic Securities notes that the ongoing strong demand for energy storage will lead to a significant improvement in the supply-demand fundamentals of lithium carbonate, transitioning from supply pressure to consumption-driven dynamics [1]

Group 1 - Hong Kong lithium stocks rebounded, with Tianqi Lithium rising over 5% [1] - As of 10:21 AM, Tianqi Lithium was up 5.18% at HKD 55.8 per share, Ganfeng Lithium rose 3.85% to HKD 60.75 per share, and CATL increased by 2.58% to HKD 517 per share [1] - Zhongtai Securities' research report indicates that the demand forecast for energy storage continues to rise, significantly improving the supply-demand balance of lithium carbonate for next year, shifting from previous surplus expectations [1]

Group 1 - The core viewpoint is that the non-ferrous metal sector is expected to enter a comprehensive bull market, driven by macroeconomic factors and fundamental demand recovery [1] - Industrial metals are anticipated to see significant price increases due to unexpected disruptions in major mines, a recovery in traditional demand from global interest rate cuts, and rising demand from new energy and AI [1] - Energy metals, particularly lithium and cobalt, are expected to experience improved supply-demand dynamics, with lithium's oversupply concerns alleviating and cobalt prices rising due to export bans [1] - Precious metals are projected to maintain a long-term bullish trend as the dollar's credit system undergoes restructuring amid ongoing monetary expansion and weakened fiscal discipline [1] Group 2 - The Non-ferrous 60 ETF (159881) tracks the China Non-ferrous Index (930708), which includes companies involved in the extraction, smelting, and processing of non-ferrous metals, covering sectors like copper, gold, aluminum, rare earths, and lithium [2] - The index represents various aspects of China's non-ferrous metal industry, combining cyclical and some consumption attributes [2]

Group 1: Industrial Metals - The report from Zhongtai Securities is optimistic about a comprehensive bull market in the non-ferrous sector, particularly in industrial metals like copper and aluminum [1] - Significant disruptions in major mines have led to a notable downward revision of global copper mine output for next year, while supply disturbances in electrolytic aluminum are also frequent due to overseas power shortages [1] - Traditional demand is expected to recover due to a global easing cycle, and although the growth rate of new energy demand is slowing, its proportion continues to rise, with AI-driven electricity demand also anticipated to provide incremental support [1] - Industrial metals are expected to experience a resonance of macroeconomic and fundamental factors, with a bullish outlook on copper and aluminum prices [1] - Despite stock prices being at new highs, valuations remain at a neutral to low level, primarily driven by rising commodity prices and the realization of company growth potential [1] Group 2: Energy Metals - The demand forecast for energy metals, particularly lithium carbonate, has significantly improved, shifting from an initial surplus expectation to a more balanced supply-demand scenario for next year [1] - The implementation of an export ban in the Democratic Republic of Congo has led to a substantial increase in cobalt prices, with supply constraints expected to tighten the market and maintain a bullish price outlook [1] Group 3: Precious Metals - The backdrop of overseas monetary expansion and weakening fiscal discipline is reshaping the dollar credit system, maintaining the long-term bullish logic for gold prices [1] - The performance of gold-related stocks has lagged behind the continuously rising gold prices, with current stock valuations at historical lows, presenting a favorable opportunity for investment [1]

Group 1 - Lithium stocks showed a rebound, with Ganfeng Lithium rising 4.44% to HKD 61.1, Tianqi Lithium up 4.34% to HKD 55.34, and Longpan Technology increasing by 3.88% to HKD 15 [1][1][1] - The 15th High-Performance Lithium Battery Conference opened in Shenzhen on November 18, where the chairman of Gaogong Lithium Battery, Zhang Xiaofei, projected that China's lithium battery shipments will see over a threefold increase from 2025 to 2035 [1][1][1] - According to Gaogong Industry Research (GGII), the period from 2027 (or 2028) to 2030 will be crucial for the large-scale construction of GWh-level capacity in the all-solid-state lithium battery industry [1][1][1] Group 2 - CITIC Securities indicated that the sustained growth in energy storage demand will lead to a price increase across the entire lithium battery supply chain, significantly improving the supply-demand fundamentals of lithium carbonate [1][1][1] - Static forecasts suggest that global lithium resource supply will reach 2.089 million tons and consumption will be 2.004 million tons in 2026, resulting in a surplus of only 85,000 tons, which is a reduction compared to 2025 [1][1][1] - Considering the inventory buildup in the industry chain, a structural shortage of lithium is expected in 2026, with lithium prices shifting from being supply-driven to demand-driven [1][1][1]

Group 1: Market Overview - A-shares opened lower with all three major indices declining: Shanghai Composite Index down 0.05%, Shenzhen Component Index down 0.07%, and ChiNext Index down 0.13% [1] Group 2: Lithium Market Insights - CITIC Securities indicates a shift from supply pressure to demand-driven dynamics in lithium carbonate, with a monthly supply of approximately 115,000 tons and a demand of 128,000 tons in November, resulting in a shortage of about 13,000 tons [2] - The ongoing strong demand for energy storage is expected to lead to a price increase across the lithium battery supply chain, with a structural shortage anticipated in 2026 despite a slight surplus forecasted [2] Group 3: Non-Ferrous Metals Outlook - Zhongtai Securities expresses optimism for a comprehensive bull market in the non-ferrous sector, highlighting that disruptions in major mines are likely to significantly reduce global copper supply next year [3] - The demand for industrial metals is expected to benefit from a global interest rate cut cycle, with both traditional and new energy demands contributing to price increases for copper and aluminum [3] - The outlook for energy metals, particularly lithium and cobalt, is positive due to improved supply-demand dynamics and price expectations following supply constraints [3] - The long-term bullish trend for gold remains intact, driven by the weakening of the dollar credit system and historical low valuations for related stocks, presenting a favorable investment opportunity [3]

Core Viewpoint - The strong demand for energy storage is driving the lithium carbonate market, leading to a supply shortage and increasing prices, with expectations of a structural shortage by 2026 [1][2]. Industry Summary - The domestic demand for energy storage is robust, with expectations of a surge in electric vehicle purchases due to the phasing out of tax incentives by 2026, resulting in increased production of lithium batteries and upstream lithium-ion cathode materials [1]. - Major lithium material manufacturers are operating at full capacity, causing orders to overflow to smaller manufacturers, indicating a high level of activity in the supply chain [1]. - The demand for lithium carbonate is rising, with a reported inventory reduction of nearly 10,000 tons entering the fourth quarter, contributing to a continuous increase in lithium prices [1]. - According to a report by CITIC Securities, the monthly supply of lithium carbonate in November was approximately 115,000 tons, while demand reached 128,000 tons, resulting in a shortage of about 13,000 tons [1]. - The consumption during the off-season remains strong, with order support expected to continue into the next year, shifting the supply-demand dynamic from supply pressure to consumption-driven growth [1]. - Long-term forecasts indicate that global lithium resource supply will reach 2.089 million tons and consumption will be 2.004 million tons by 2026, suggesting a structural shortage despite a slight surplus when not considering certain factors [1]. - The lithium carbonate market is expected to transition from supply-driven pressures to demand-driven price increases [1]. Company Summary - Companies involved in the lithium carbonate supply chain include Ganfeng Lithium (01772), Tianqi Lithium (09696), and Zhongwei New Materials (02579), which are positioned to benefit from the improving market dynamics [3].

Core Viewpoint - The recent surge in lithium carbonate prices, driven by rising costs, demand, and market sentiment, suggests a potential new "super cycle" for lithium battery materials may be on the horizon [1][3][7] Price Movements - On November 17, 2023, lithium carbonate futures on the Shanghai Futures Exchange rose by 9%, closing at 95,200 yuan per ton, with a daily increase of 7,840 yuan per ton [1] - Major lithium producers in the A-share market, Tianqi Lithium and Ganfeng Lithium, saw significant stock price increases of 9.87% and 7.48%, respectively, on the same day [1] Demand and Supply Dynamics - Ganfeng Lithium's chairman indicated that if lithium carbonate demand grows over 30% next year, prices could exceed 150,000 yuan per ton, with potential to reach 200,000 yuan per ton if demand growth hits 40% [3] - The projected global demand for lithium carbonate is expected to reach 1.9 million tons by next year, with supply potentially increasing by 250,000 tons, leading to a balance in supply and demand [3] Cost Factors - The increase in lithium carbonate prices is attributed to rising costs, particularly due to expectations of higher lithium mica costs [5] - The cost of producing lithium carbonate from lithium mica is estimated to rise by approximately 3,500 yuan per ton, bringing the total production cost to around 77,000 yuan per ton [6] Storage Demand - The primary driver of the recent lithium carbonate price increase is the surge in demand for energy storage solutions, which is expected to significantly boost the demand for lithium batteries [7] - The domestic energy storage market is experiencing a turning point in economic viability, driven by marketization of renewable energy and capacity pricing [7] Supply Chain Considerations - The current supply situation for lithium carbonate differs significantly from previous cycles, with new lithium resources being developed globally [8] - There are concerns about potential supply bottlenecks, particularly with the Jianshanxia Mica Mine not expected to resume production in the short term, which could impact prices [8]

Core Viewpoint - Lithium has become a prominent focus in the capital market, with carbonate lithium futures reaching a new high of 95,200 yuan/ton, marking a 9% increase on November 17 [1] Group 1: Market Performance - The lithium mining index in the A-share market rose by 7.16%, leading all index sectors, with 9 out of 23 constituent stocks hitting the daily limit [1] - Several stocks, including Tibet Mining and Salt Lake Shares, saw increases of over 5% [1] - Seven constituent stocks have experienced price increases exceeding 110% year-to-date, with a notable 264.12% increase for Zhongda Mining [1] Group 2: Supply and Demand Dynamics - The recent surge in carbonate lithium prices is attributed to a combination of supply-demand dynamics, news factors, and capital inflows [1] - Strong demand from the energy storage sector is a key driver of the current rise in lithium prices, with battery-grade carbonate lithium prices increasing by 15.76% from the beginning of November [2] - The domestic energy storage market is experiencing growth due to improved profit margins, while overseas demand is driven by policy changes and aging grid infrastructure [2] Group 3: Future Projections - Predictions indicate that by 2026, carbonate lithium demand may grow by 30% to reach 1.9 million tons, with supply capacity expected to increase by approximately 250,000 tons [4] - The U.S. energy storage capacity is projected to grow significantly, with a 53% increase expected in 2025 compared to 2024 [3] - The lithium battery supply chain is anticipated to maintain a tight supply-demand structure, with a projected inventory reduction of over 10,000 tons in November [5] Group 4: Price Trends and Market Sentiment - Analysts suggest that the current price rebound in the lithium battery supply chain is primarily driven by short-term factors rather than a fundamental reversal in the industry [3] - There are concerns about potential price corrections due to market sentiment cooling and profit-taking by investors [5] - The market is currently experiencing a supply shortage due to low operating rates in domestic salt lake production and underperformance in overseas lithium mining [5][6]

1. Report Industry Investment Rating - Upgrade PLS to Overweight, MIN, IGO, LTR to Neutral [1] 2. Core Viewpoints of the Report - The demand for energy storage systems (ESS) will lead the market into a deficit, and short - term and long - term prices are upgraded [1] - In 2026, the supply - demand pattern of battery production will improve, and the potential for price increase will emerge. The explosion of ESS demand and supply disruptions of Chinese lithium mines jointly drive up lithium prices and industry prosperity [7] - Currently, the demand expectation for lithium carbonate is intensifying. With strong reality and strong expectation, the price of lithium carbonate has risen significantly and is expected to remain strong above 90,000 yuan/ton [7] 3. Summaries According to Related Information Information about Lithium Carbonate Demand and Supply in 2025 and 2026 - In 2025, the global demand for lithium carbonate is estimated to be 155 tons, while the supply capacity is over 170 tons, resulting in an excess of about 20 tons and low prices this year [6] - In 2026, the demand for lithium carbonate is expected to grow by 30% to 190 tons, and the supply capacity is estimated to increase by about 25 tons, with a basically balanced supply - demand situation and potential for price increase [6] Information about Lithium Carbonate Price Changes - On November 16, the market's bullish sentiment fermented after the statement of Ganfeng Lithium's chairman, and the price of lithium carbonate exceeded 90,000 yuan/ton, rising to 93,800 yuan/ton with a 7.47% increase [7] - If the demand growth rate of lithium carbonate in 2026 exceeds 30% or even reaches 40%, the price may break through 150,000 yuan/ton or even 200,000 yuan/ton [6] Information about the Market Outlook - The resumption of production at Xiawo will partially ease market tension but is difficult to change the trend of the supply - demand gap [7]