The price of key materials in the upstream of lithium electricity rises sharply, a quick look at the list of core companies in the industrial chain.

Boosted by the hot sales of new energy vehicles, the upstream lithium materials boom significantly. In the context of rigid supply, the price of lithium hexafluorophosphate has continued to rise since the second half of 2020. Data show that the average domestic price of lithium hexafluorophosphate was 330000 yuan / ton on July 1, up 5000 yuan / ton compared with yesterday's price. The average price of lithium iron phosphate electrolyte in China is 84000 yuan / ton, which is 1000 yuan / ton higher than yesterday's price.

Lithium hexafluorophosphate is an important upstream raw material for electrolyte, and electrolyte is one of the important mid-stream materials for lithium batteries at present. Driven by the substantial increase in the installed capacity of power batteries, the demand for electrolyte increases rapidly. By the end of 2020, the domestic production capacity of lithium hexafluorophosphate will be 56500 tons per year, with CR4 of 55%. Everbright Securities predicts that about 15000 tons of lithium hexafluorophosphate will be needed in the field of power batteries in 2021 and 54400 tons in 2025. The average annual growth rate is about 40%, and the market prospect is very broad.

Everbright Securities Research report pointed out that the barriers to entry for the production of lithium hexafluorophosphate are relatively high, and even though the current industry operating rate and output have risen obviously, the main increments are still concentrated in the leading enterprises with mature technology, high quality products and stable customers. Moreover, due to the high investment intensity and long production expansion cycle of lithium hexafluorophosphate project, new competitors need sufficient financial support and long return cycle capacity. Therefore, the increase in supply of lithium hexafluorophosphate due to new entrants will be very limited in the short term.

In addition, from a cost point of view, the characteristics of high production capacity and low cost of leading enterprises make them have stronger pricing power in the industry, and prices are expected to remain high under the tight supply and demand situation.

Warburg Securities also pointed out that the current overall downstream demand for electrolytes remains high, orders are saturated, and the rapid growth of electrolytes has led to a rapid increase in the demand for lithium hexafluorophosphate in the industry. however, lithium hexafluorophosphate has no new effective production capacity in the first half of this year, and it is difficult to achieve effective production expansion in 2021.

It is worth noting that as an upgraded substitute for lithium hexafluorophosphate, LiFSI began to step onto the industry stage. The state requires lithium batteries to develop in the direction of higher safety and higher energy density in the future, that is, the safety requirements of electrolytes are greatly improved. LiFSI, a new type of electrolyte solute with higher safety and stability, has officially ushered in the opportunity for development.

Everbright Securities Research News pointed out that under the strong promotion of national policy, the new energy vehicle industry ushered in a period of vigorous development. The rapid increase in downstream demand directly leads to the rapid growth of the demand for electrolyte and its raw material lithium hexafluorophosphate. Electrolyte, lithium hexafluorophosphate and LiFSI all ushered in new development opportunities.