[SMM analysis] there is still room for upside in the future market of lithium hexafluorophosphate.

SMM4 March 22: prior to this, Dofuoduo announced that the price of lithium hexafluorophosphate, an important raw material in the electrolyte, has increased by 30, 000 yuan per ton, while international customer prices have also increased across the board, an increase of about 4500 US dollars per ton.

As we all know, the raw materials of electrolytes can be divided into three categories, namely, solvents, functional additives and lithium hexafluorophosphate. Among them, lithium hexafluorophosphate, as one of the most important core raw materials of electrolyte, accounts for a very high proportion in the electrolyte. According to SMM statistics, among the current major electrolyte enterprises, the material cost of lithium hexafluorophosphate alone accounts for nearly 40% of the total electrolyte cost, and for some small and medium-sized electrolyte enterprises that have not locked up with the upstream, this proportion can even reach 55%, that is, more than half of the material cost. Therefore, the price fluctuation of the raw material will have a great impact on the price of the electrolyte itself.

Why is lithium hexafluorophosphate soaring?

On the demand side, China's new energy vehicle market has continued to expand since the second half of last year, and has continuously set a new monthly historical production and sales record for new energy vehicles. In the first half of last year, when the domestic market was depressed as a result of the novel coronavirus epidemic, this can be seen in the historical record of production and sales of 136.5 and 1.366 million new energy vehicles in the second half of last year alone. More importantly, the trend continues. According to SMM statistics, as one of the four core materials of power battery, the market share of power battery electrolyte can account for 60% of the total market share of electrolyte, and with the continuous discharge of new energy vehicles, this share has a further expanding trend. According to data from the China Automobile Association, in the first quarter of this year, the cumulative sales of new energy vehicles in China reached 515000, an increase of 279.6%. In addition, in recent years, overseas demand for lithium hexafluorophosphate is increasing rapidly, especially in Europe, under the guidance of stricter carbon emission policies and relevant new energy policies. the strong demand downstream transfers to the upstream, driving up the price of lithium hexafluorophosphate.

In addition, from the history of lithium hexafluorophosphate, it can be found that the price of lithium hexafluorophosphate rose sharply around 2015, and the market price once rose to 400000 yuan / ton. The main reason is the oversupply caused by the localization of lithium hexafluorophosphate and the rapid expansion of production capacity. However, with the imbalance between supply and demand and the lower-than-expected growth rate of demand for new energy vehicles, the price of lithium hexafluorophosphate has continued to decline for a long time, to less than 70,000 yuan / ton by 2020. During this period, the industry is also in constant competition and optimization, most enterprises fall into long-term losses, superimposed the impact of the epidemic and other factors, increased industry concentration, high costs, substandard enterprises and production capacity are quickly eliminated. With the sudden outbreak of domestic and foreign demand in the second half of the year, supply and demand fell into an imbalance, and the insufficient production capacity of lithium hexafluorophosphate highlighted, driving prices up.

At the same time, as a dangerous chemical raw material, the production and expansion of lithium hexafluorophosphate are strictly regulated by local governments. The cycle of environmental assessment is extremely long, and the cycle of production expansion is generally more than 1.5 years. Therefore, at a time of imbalance between supply and demand caused by the current outbreak of demand, production capacity can not be expanded rapidly in the short term, and the closed production line can not be quickly resumed. And the hoarding and preparation behavior of some manufacturers has also further aggravated the shortage of supply in the market, resulting in a simultaneous rise in volume and price.

All in all, the current price of lithium hexafluorophosphate has an obvious imbalance between supply and demand, and the upstream material end cannot meet the strong demand downstream in a short period of time. At the same time, there is also a shortage of production capacity of lithium carbonate, the main raw material of lithium hexafluorophosphate, and the price is substantially upward. it is expected that lithium hexafluorophosphate still has upside space in the future.