[SMM Analysis] is very popular! Enterprises are scrambling to increase the new production capacity. Will the price of lithium iron phosphate fly higher?

SMM12 March 31: in November, a total of 5.9GWH of ternary batteries were loaded in China, up 56.1% from the same period last year and 71.6% from the previous month; lithium iron phosphate batteries totaled 4.7 GWH, up 91.4% from the same period last year and 95.5% from the previous month. From January to November, the installed capacity was 50.66GWh. the ternary battery decreased by 8.1% compared with the same period last year, while the iron-lithium battery increased by 12.5% compared with the same period last year. It can be seen that the performance of iron-lithium battery is better than that of ternary battery this year, and its share in the passenger car market is gradually increasing.

Source: SMM Power Battery Alliance

The strong terminal demand will increase the share of lithium iron phosphate in the future.

The increase in iron-lithium batteries in the second half of the year mainly comes from the increase in matching passenger models. It can also be seen from the catalogue recommended by the Ministry of Industry and Information Technology that the number of passenger models equipped with iron-lithium batteries this year has increased a lot compared with last year, including the best-selling models BYD "Han" and Hongguang MINI. In addition, Tesla announced in early October that his standard continued flight version Model 3 has changed from ternary batteries to iron-lithium batteries. Driven by a number of best-selling models, the installed capacity of iron-lithium batteries reached 4.7 GWH in November, up 91.6% from a year earlier, and the proportion of installed capacity also rose to 44% from 13% in February. It is expected to account for 25% of all-electric passenger cars in December.

In previous years, with the popularity of ternary batteries, the proportion of iron-lithium batteries in passenger cars is decreasing year by year. However, with the decline of subsidies in 2019, low cost, strong safety and improved battery technology of iron-lithium batteries, iron-lithium batteries have returned to the stage of the passenger car market, and the number of new models equipped with iron-lithium batteries has increased in 2020. SMM estimates that lithium iron phosphate batteries will account for 11% of the pure electric passenger car market in 2020.

In the long run, lithium iron phosphate batteries will dominate the A0 and A00 low-end markets. There are about 800000 non-compliant low-speed electric vehicles in China, and the A00 market can better solve the problem of legalization of low-speed electric vehicles. It can be seen that the A00 market has great potential in the future. However, due to the low-end models with low power, only about 10KWh, the demand for iron lithium battery is relatively small. In addition, B-class and C-class models will also use iron-lithium batteries, such as BYD, Tesla, Xiaopeng and so on. As overseas car company Tesla sets a precedent for supporting iron-lithium batteries, it does not rule out that overseas car companies such as Volkswagen, Mercedes-Benz and Audi will also begin to use iron-lithium batteries to reduce costs and enter the Chinese market faster in the future. According to BYD's future plans, the new models are expected to be equipped with iron-lithium batteries, and BYD electric cars carry a higher amount of electricity, so it can further increase the installed capacity of iron-lithium batteries.

In addition to passenger cars, the electric two-wheeler market is also a potential stock for the future. At present, the annual output of electric bicycles is basically more than 30 million, and the degree of lithium electrification continues to increase this year. Lithium electrification is expected to reach 25% for the whole year and continue to grow to 40% next year. Due to the advantages of high safety, long cycle life and low cost of iron-lithium battery, the demand for takeout cars, express vehicles and other market areas is gradually increasing. In the future, it will gradually infiltrate shared motorcycles, civil markets, and so on. It is expected that iron-lithium batteries will account for about 50% of the electric vehicle market next year, occupying part of the market share of ternary and lithium manganate.

In terms of energy storage market, the construction speed of domestic 5G base stations this year is faster than expected. by the end of November 2020, nearly 700000 5G base stations have been opened nationwide, and more than 600000 are expected to be built in 2020.

Because the frequency band of 5G is higher and the diffraction ability is weaker, we can only increase the power to expand the radiation range. Therefore, in addition to macro base stations, 5G base stations also need to add a lot of micro base stations, and adopt the cooperation of "macro stations + small stations". Because the penetration of 5G base stations is weak, the total number of 5G base stations will be 2-3 times higher than that of 4G base stations. It is estimated that 5.5 million 5G macro stations and 10 million 5G small stations will be built. According to the calculation of 5GC-band power consumption of 4000W per station and emergency response time of 3.5h, the battery demand of the new 5G base station in 2020 can reach 8.4GWh.

In addition, coupled with the increased demand for overseas wind power photovoltaic energy storage, the frequent occurrence of hidden problems in overseas ternary batteries, and the increased demand for iron-lithium batteries in overseas energy storage markets, it is expected that the demand for domestic iron-lithium batteries in overseas energy storage markets will increase by about 4-5 times next year.

Head enterprise plus code layout lithium iron phosphate

Lithium iron phosphate battery is getting more and more applications because of its advantages of low cost, high safety and long life. And BYD, Ningde era, Guoxuan Hi-Tech, Yiwei Lithium Energy and other power battery head enterprises are expanding lithium iron phosphate battery production capacity.

BYD: December 25, Hunan Yuneng New Energy Battery Materials Co., Ltd. recently completed the capital increase, the capital increase price is 3.3419 yuan per share, including Ningde Times New Energy Technology Co., Ltd., BYD Co., Ltd. and other strategic investors and employee shareholding platforms to increase capital with cash, with a total capital increase of 648 million yuan.

Ningde era: recently, the pure electric cruise ship "Yangtze River three Gorges 1", the world's largest pure electric green commercial ship, has officially started construction. The cruise ship is equipped with Ningde era power batteries with a total capacity of 7.5MWh, which is equivalent to the total battery capacity of more than 100 pure electric vehicles. The battery system consists of more than 10,000 Ningde era high-safety lithium iron phosphate batteries. "Yangtze River three Gorges 1" is a high-tech ship research and demonstration project of the Ministry of Industry and Information Technology and a traffic power pilot project of the Ministry of Transportation. It is jointly developed by Ningde Times and other companies.

Longji Technology: on December 25, Longyi Technology announced that Beitre and the company jointly signed the Framework Agreement on the acquisition of Lithium Iron Phosphate related assets and Business of Beitre New Materials Group Co., Ltd. Longyi Technology agreed to pay a sincere payment of 30 million yuan to Betteri's bank account within 7 working days from the date of signing this framework agreement.

German Nano: according to insiders, the current capacity utilization of German Nano is almost saturated, and it is hoped that the project can reach production in the first quarter of next year, which is expected to release 30,000 tons of new production capacity. "the increase in product prices is mainly due to cost drive. The gross profit margin of lithium iron phosphate enterprises is relatively low this year. At present, the company's capacity utilization rate is nearly saturated, and the future thickening profits still need to be expanded. At present, several new production capacity projects of the company will be able to release about 30,000 tons by the first quarter of next year. " A German Nano insider said.

In order to meet the high demand in the iron-lithium market next year, many iron-lithium material enterprises have expanded the production line of lithium iron phosphate one after another, and it is expected that the structure of supply and demand will be tight next year, and the situation of overcapacity will be greatly improved in the past few years.

Price Prospect of Lithium Iron Phosphate in 2021

Affected by the rising price of lithium carbonate, the price of lithium iron phosphate continues to rise. According to SMM research, the price of lithium iron phosphate has shown an overall upward trend since December. As of December 31, the average price of lithium iron phosphate (power type) was 38000 yuan / ton, up 4000 yuan / ton from December 1, a range of 9.35%.

Average price of SMM lithium carbonate and lithium iron phosphate

With a high increase in industrial carbon prices and an increase in iron phosphate prices, lithium iron enterprises are in short supply, while new energy commercial vehicles are in short supply at the end of the year, and downstream demand is better, coupled with small power and overseas energy storage market demand also continues to increase, overall, lithium iron phosphate prices still have room to rise.

The price of iron and lithium has fluctuated near the cost price for a long time this year, and the market demand for terminal power has weakened in the first half of the year. Iron and lithium basically rely on energy storage orders, and the market competition is fierce. In addition, the price of lithium carbonate is in the downward range in the first half of this year, and the price of lithium iron has plummeted.

Lithium carbonate rose higher in the fourth quarter, the price rose nearly 13000 yuan / ton, coupled with the increase in the cost of iron phosphate due to seasonal reasons, iron lithium cost pressure increased, taking into account the small profit space of the iron lithium plant, iron lithium enterprises have adjusted prices one after another, but due to the lower willingness of downstream battery companies to increase the price of raw materials, the price rise is transmitted to the downstream slowly. The price of iron and lithium basically rose in mid-late November and mid-December. This week, due to the excessive increase in the price of lithium carbonate, iron and lithium enterprises are more difficult to bear the cost pressure, one after another in advance on the 30th to raise prices, prices rose 3000-4000 yuan / ton.

Considering that the high terminal demand, superimposed supply and tight supply in 2021 will lead to a rise in lithium carbonate prices, in addition, the oversupply of lithium iron phosphate will improve next year, and the market demand for power, energy storage and small power will increase significantly, SMM expects the price of lithium iron phosphate to continue to increase, and the rate of increase may increase.

At present, new energy vehicles are the general trend of the global car market. Since the second half of this year, more and more all-electric passenger vehicles are equipped with lithium iron phosphate batteries. SMM expects lithium iron batteries to account for 40% of new energy vehicles in 2021. 45%. How much will the replacement of ternary batteries by iron and lithium affect the demand for cobalt and lithium in China's power market in the future? The annual report of SMM cobalt lithium new energy industry chain makes a comprehensive and in-depth analysis and data demonstration on the application and performance comparison of ternary and iron lithium battery, the future development forecast and the price prospect of lithium iron phosphate in 2021.