High demand for lithium cathode materials LG Chemical throws out radical production expansion plans or focuses on high-nickel routes

With the accelerated expansion of the new energy vehicle market, leading to a substantial increase in lithium battery orders, power battery manufacturers are also constantly seeking to expand production to catch up with the booming pace of the industry.

LG Chemical (LG Chem) plans to increase the company's battery cathode production in South Korea to 130000 tons per year, more than tripling the current capacity of 40, 000 tons per year, TheElec reported today.

It is inferred from some details of the report that the content of this production expansion is mainly focused on the positive electrode of high-nickel battery.

Today, LG Chemical's plant in Yishan, South Korea has an annual capacity of 5000 tons, while the three plants in Qingzhou have a total capacity of 35000 tons. The fifth plant will begin partial production this year, with an estimated capacity of 30, 000 tons per year. In addition, the company plans to build two new plants before the end of this year, with a total production capacity of 60,000 tons.

Since positive electrodes account for 40% of the total cost of batteries, and the prices of nickel, cobalt and lithium fluctuate greatly, it will be difficult for battery companies to control costs and profit margins if they rely solely on external supply. Therefore, LG Chemical decided to greatly expand the output of cathode materials this time.

It is for this reason that LG Chemical has also launched a joint venture with Huayou Cobalt to build a new ternary precursor material for high nickel batteries in China. The project currently has an annual production capacity of 45000 tons, and it is estimated that after the completion of the construction of the whole project, the production capacity will reach 100000 tons.

It is reported that after 2024, LG Chemical plans to increase global cathode capacity to 230000 tons to ensure 50% of its own total demand-last year, its subsidiary LG Energy (LG Energy Solutions) used nearly 300000 tons of positive electrodes.

LG has also developed a specific roadmap and strategic partnership plan to obtain more ternary precursors and nickel sulfate.

It is worth mentioning that according to previous reports, LG Chemistry will start supplying NCMA high-nickel batteries to Tesla this month.

Lithium electric materials usher in a period of rapid growth

Under the trend of automobile electrification, the permeability of electric vehicles is increasing, which pushes up the demand for power batteries. According to SNE Research, the global installed capacity of power batteries reached 21.1 GWH in May, an increase of 213% over the same period last year. Industry insiders predict that the global demand for lithium batteries is expected to reach 1400GWh in 2025.

With the improvement of the terminal market, mainstream power battery manufacturers have also significantly accelerated the pace of production expansion. Just last week, SK Innovation (SK Innovation), another big South Korean battery maker, updated its expansion plans, saying it planned to increase battery production to the year of 200GWh/ by 2025, up 60 per cent from the previously announced target of 2025 125GWh.

The production expansion plan of LG Energy mentioned above is more aggressive, reaching 260GWh capacity by 2023, making it the number one power battery in the world. In addition, Samsung SDI, AVIC Lithium, Honeycomb Energy, Vision Power and other enterprises have also announced production expansion.

Downstream demand volume, upstream battery materials generally ushered in a price increase. According to the statistics of Zhu Dong team of Ping an Securities, in terms of cathode materials in the upstream, the price of ternary materials has increased by more than 30% compared with the low point, the range of lithium carbonate / cobalt sulfate has increased by more than 100%, and the positive electrode of lithium iron phosphate has increased by more than 50%. It is expected that the demand for lithium carbonate and cobalt will be strong in the second half of the year, which is expected to drive the positive price to remain strong. In addition, it is also optimistic about copper foil and electrolyte links.

Dongguan Securities also pointed out that the shipments of power batteries are rising, and the lithium materials industry will usher in a period of rapid growth.

Among the relevant enterprises in the domestic industrial chain,

Rongbai Technology is the domestic lithium cathode leader, the company's precursor production capacity has been put into operation, actively expanding high nickel production capacity;

When Sheng Technology is another leader of ternary cathode materials, overseas customers have accelerated the volume.

Divine material is mainly engaged in electrolyte, the shortage price of hexafluorine will remain high, the company has signed a long order with Ningde, and its global share has increased rapidly.