Thanks to a series of major discoveries, China now boasts the world's second-largest lithium reserves after Chile. According to the China Geological Survey, China's breakthrough In lithium exploration, the company has increased its global share of lithium reserves from 6% in 2020 to 16.5% now, surpassing Australia, Argentina and Bolivia. Since 2021, the country has stepped up its lithium exploration efforts, contributing to the discovery of 30 million tons of new lithium ore in Sichuan, Qinghai, Jiangxi and other provinces.
China has confirmed more than 14 million tons of lithium in its salt lakes, making it the world's third largest salt lake lithium resource base. Furthermore, the China Geological Survey says technological advances in extracting lithium from lepidolite will allow the extraction of the newly discovered 10 million tons of lithium resources at lower cost and with higher utilization efficiency.
Thankfully, traders will have little trouble getting into China's burgeoning lithium sector. In 2023, China's Guangzhou Futures Exchange began trading for the first time in its history. lithium carbonate futures contractbecoming the fourth exchange in the world to offer such contracts. The introduction of these trading instruments is aimed at stabilizing raw material prices and promoting sustainable development of the EV industry. In that short period, Guangzhou Futures Exchange's new lithium carbonate business has london metal exchange and singapore exchangethanks to China's dominance in the global lithium supply chain. This may not have been all that surprising given that China is the world's largest lithium consumer.
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Rapidly growing EV field
Given that lithium is a key component of the batteries that power electric vehicles and numerous consumer electronics devices, China's lithium discovery comes at a perfect time as the electric vehicle sector is starting to take off. It was done. China's 10 millionth EV rolled down Amid growing concerns about overcapacity, production lines opened in October and exceeded 2023 output seven weeks before the end of the year. Chinese EV makers delivered 9.75 million vehicles to mainland buyers from January to October, a significant 34% year-on-year increase. China Passenger Car Association (CPCA) Secretary-General Cui Dongxiu said China's EV revolution has been boosted by government subsidies of up to $2,800 per vehicle for trading in old cars for EVs and more fuel-efficient cars. predicted that it would continue unhindered. . China's new energy vehicle (NEV) sales exceeded conventional car sales for the first time in history in July, accounting for more than half of all sales in the month.
“If EV sales outpace traditional gas-powered cars, existing production facilities and workers will become redundant. Demand for gasoline cars will weaken in the next few years“Fate Zhang, founder of Shanghai-based EV data provider CnEVPost, told the South China Morning Post.
BYD Co., Ltd. (OTCBB: BYDDY) remains China's largest EV seller, with sales exceeding 500,000 units for the first time in October. BYD reported Revenue for the third quarter of 2024 was $28.2 billion, a 24% year-over-year growth, and net income was $1.63 billion, an 11.5% year-over-year increase. In comparison, tesla company (NASDAQ:TSLA) reported Third-quarter sales were $25.2 billion, up 8% from the same period last year, and net income was approximately $2.17 billion, or 62 cents per share, compared to $1.85 billion, or 53 cents per share, in the year-ago period. cents).
That said, China is increasingly focused on: protect A vibrant EV sector. China's Ministry of Commerce has proposed export restrictions on technology essential to battery components and the processing of critical minerals such as lithium and gallium. The Chinese government is heading down this path again to protect its dominant 70% market share in processing lithium for EV batteries and support major domestic battery manufacturers. Proposed restrictions on lithium battery technology could hamper overseas expansion plans of China's major battery manufacturers, including: Quatre.
”These proposed measures will be a move to maintain this high market share and ensure the production of lithium chemicals for China's domestic battery supply chain,” said battery consultant Benchmark Mineral Intelligence. said Adam Webb, Head of Ingredients.he told Reuters. ”Depending on the level of export controls imposed, this could pose a challenge for Western lithium producers looking to use Chinese technology to produce lithium chemicals.” he added.
Written by Alex Kimani, Oilprice.com
