Divine materials: actively promote the project of 100000 tons of electrolyte and 150000 tons of lithium materials

SMM: a few days ago, Tianci material said in a survey by investor institutions that due to the strong demand for downstream and terminal new energy vehicles, the company's sales of electrolyte products increased in the third quarter, and shipments in the first three quarters increased by more than 30% compared with the same period last year. With the continuous improvement of market demand, the company is also actively expanding production, including investment in the construction of an annual production capacity of 100000 tons of electrolyte (Fuding) and an annual output of 150000 tons of lithium materials, etc., which can meet the market demand in the next 3-5 years.

As for whether the new electrolyte additive LiFSI can maintain a high price in the future, Divine material believes that there is little room for LIFSI price decline in the near future, and in the future, with the gradual increase of LIFSI demand and production scale, the scale effect begins to highlight, the cost of LIFSI may decline, and its price will change accordingly. Tianci also mentioned that the price of solvent has risen recently due to the price fluctuations of upstream bulk products, while the price of the company's electrolyte products is also being adjusted accordingly.

It is understood that Tianci acquired its competitor Dongguan Kaixin in 2014 and became the largest domestic electrolyte manufacturer by shipments. In the domestic electrolyte market in 2019, divine materials accounted for 22%, New Zhou Bang accounted for 18%, and Cunninghamia lanceolata shares accounted for 15%. In the first quarter of 2020, Tianci's market share increased to 31%, New Zhou Bang accounted for 19%, and Jiangsu Cathay Pacific accounted for 16%.

In November this year, Tianshi announced that Jiujiang Tianzhi, a wholly owned subsidiary of the company, signed an agreement with Tesla for the supply of lithium-ion battery electrolyte products to Tesla. The agreement agreed on the product pricing model, supply mode, product standards and other contents during the business cooperation.

For now, Tesla is very determined to plan for home-made batteries and is expected to start shipping on a large scale in 2022. At that time, Tesla's battery output is expected to be about 10GWh, corresponding to the electrolyte demand of 20, 000 tons. The industry is expected to be supplied by divine materials at the initial stage, with orders for the corresponding electrolyte approaching 20,000 tons in 2021, and the share of divine gifts in the later stage is expected to be more than 50%. However, divine material said that the above agreement did not impose mandatory restrictions on Tesla's purchase volume, and the final sales amount should be based on the settlement of the purchase order issued by Tesla.

In order to further enhance market competitiveness and meet customer demand, Tianci announced in May that the company would invest in a project with an annual production capacity of 100000 tons of electrolyte, with a total investment of 289.4533 million yuan. Tianci said that the implementation of this project is the production capacity reserve of the company according to the future needs of customers for electrolytes. After the completion of the project, it will effectively solve the problem of insufficient production capacity of the company's future supporting service customers.

At present, the pattern of electrolyte industry in China is characterized by the concentration of head enterprises and a large number of small and medium-sized enterprises. From the perspective of market concentration, the market concentration of TOP6 in the domestic electrolyte industry in 2018 exceeded 70%, and the companies with top shipments were Divine Materials, New Zebang, Jiangsu Cathay Pacific, Cunninghamia lanceolata, Tianjin Taurus, Jinguang Hi-Tech and so on. By 2019, according to Chuancai Securities statistics, the domestic electrolyte TOP6 market share has reached 77%.

Relevant data show that by the end of 2019, the production capacity of domestic TOP10 electrolyte manufacturers totaled 312000 tons. China's electrolyte shipments have increased rapidly from 43000 tons in 2014 to 183000 tons in 2019, with a compound growth rate of more than 30 percent. Tianfeng Securities estimates that the global demand for electrolytes in 2020 and 2025 will be 362000 tons and 1.171 million tons respectively, and the corresponding market space will reach 13.6 billion yuan and 36.9 billion yuan.