[SMM analysis] the profit of the energy storage battery of the base station is on the low side. The battery factory is still actively bidding to deal with the current operating difficulties

SMM5 March 29: with the issuance of 5G licenses in 2019, China began the first year of 5G base stations, and the domestic boom of building 5G base stations began in 2019.

However, in 2020, due to the impact of the epidemic on the macro-economy, the central government in order to alleviate the damage to the economy, through the construction of infrastructure to digest the crisis, put forward the concept of "new infrastructure", which also includes the construction of 5G base stations.

The construction of 5G base stations has led to the demand for base station-related equipment. In March this year, China Mobile issued a tender announcement for the centralized procurement of lithium iron phosphate batteries for communications in 2020. The total amount of lithium iron phosphate battery for communication is 610.2 million Ah (3.2V), and the period for meeting the procurement demand is one year.

In this large-scale bidding, Jiangsu Zhongtian Science and Technology Co., Ltd. bid price of 1.292 billion yuan, winning share of 18.85%; Jiangsu Haisida Power supply Co., Ltd. bid price of 1.3286 billion yuan, winning share of 15.94%; Shuangdeng Group Co., Ltd. bid price of 1.422 billion yuan, winning share of 14.49%; Huizhou Yiwei LiNeng Co., Ltd. bid price of about 1.373 billion yuan, winning share of 13.04%; Zhejiang Nandu Power supply Co., Ltd. bid price is about 1.359 billion yuan, winning bid share is 11.59%; Shenzhen Xiongtao Power supply Co., Ltd. bid price is 1.4098 billion yuan, winning bid share is 10.14%; Harbin Guangyu Power supply Co., Ltd. bid price is 1.397 billion yuan, winning bid share is 8.70%; Dongguan Lilang Battery Technology Co., Ltd. bid price is about 1.454 billion yuan, winning bid share is 7.25%.

In addition, China Tower also issued the "2020 Lithium Iron Phosphate Battery products intensive e-commerce procurement project procurement notice", which will invite tenders for the procurement of 2GWh lithium iron phosphate battery products.

At the end of 2019, the number of 5G base stations in China exceeded 130000. The capacity of a 5G base station is about 10.8KWh. By the end of March 2020, nearly 200000 5G base stations have been built in China, and the Ministry of Industry and Information Technology estimates that the number of 5G base stations will exceed 600000 this year.

At present, the cost of the iron lithium battery invited by China Mobile is 0.72 wh, 0.75 yuan / wh, while that of the China Tower is 0.50 yuan / wh. The cost of iron-lithium battery is about twice as much as that of lead-acid battery, but iron-lithium battery has a longer service life. To achieve the same service life, lead-acid battery costs three times more than iron-lithium battery. Due to the lower cost of iron-lithium batteries, iron-lithium batteries are now more popular in base stations. In addition, SMM learned that there are regulations requiring the base station energy storage battery to be used for five years, while the lead-acid battery can not meet this requirement, which also forced the market operator to choose iron lithium battery.

Although there is a certain domestic base station energy storage market and major energy storage battery manufacturers actively bid, according to SMM research, the current market profit of lithium iron phosphate is generally low, coupled with the macroeconomic downturn, domestic and foreign market consumption is cold, and the construction of iron-lithium energy storage projects except base stations is subject to the epidemic, resulting in a downturn in the iron-lithium related market. SMM believes that the main purpose of the manufacturer's bid is to expand the iron-lithium business to maintain the normal operation of the company in order to cope with the impact of the epidemic.

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