Hong Kong stock concept tracking | Lithium carbonate prices remain strong. Institutions are more optimistic about short-term lithium prices (including concept stocks)

On January 23, the main lithium carbonate futures contract of the Guangqisuo rose more than 5%, reaching a high of 17,800 yuan/ton. According to a report by J.P. Morgan, the bank conducted on-site inspections in Yichun last week, visiting lithium refining plants/tailings facilities and meeting with local experts. The report noted that the restart schedule of Contemporary Amperex Technology's Jiantouwo lithium mine area is still uncertain, and before its restart, lithium prices will remain high; the cost of lithium carbonate from the integrated lithium mica mine has dropped to 60,000 yuan per ton; current prices are inducing more supply, and the recovery volume will significantly increase by 2028. A research report from China Securities Co., Ltd. pointed out that the Jiangxi mica lithium mine is facing production pressure due to the subsequent process of change of permit, and after the implementation of the "Comprehensive Waste Management Action Plan", tailings treatment supervision has become stricter, amplifying concerns on the supply side. Meanwhile, some lithium salt plants have maintenance plans during the Spring Festival, with little flexibility on the supply side; although the annual supply increment is large, it does not help alleviate the tight situation in the first half of the year. As for demand, due to the expectation of increased exports brought by export tax rebates, the off-season demand is not weak, there are difficulties in accumulating stocks, laying the foundation for supply tightness in the second quarter. According to SMM, domestic lithium carbonate inventories continued to decline weekly by 783 tons, with finished product inventories in upstream lithium salt plants below 20,000 tons and downstream material plant inventories below 40,000 tons, at a relatively low level, with a price drop bringing a more obvious restocking effect. The off-season demand is not weak, maintaining destocking, and the fundamental situation of lithium is relatively strong, with worries about supply tightness intensifying in the second quarter. J. P. Morgan is more optimistic about lithium prices in the short term, but more cautious about the medium-term trend. The low cost of lithium mica impressed the bank, and it is expected that costs will further decline in the future. The bank sees trading opportunities in short-term lithium stocks, with stock prices expected to catch up with the rise in lithium carbonate prices. According to J.P. Morgan, lithium prices are expected to remain high as investors delay their expectations for mine restarts. Hong Kong-listed companies in the lithium carbonate industry chain: Ganfeng Lithium Group (01772), Tianqi Lithium Corporation (09696)