SHANGHAI, Apr. 14 (SMM) - China cracked down on subsidy fraud of new energy vehicles and released new subsidy policy in 2016. Cobalt prices surged all the way. What nickel, cobalt and lithium price trends will be in 2017? How will policy affect lithium iron phosphate industry？
At the 2nd Cathode Material Trade Summit held April 8, SMM’s managing director Ye Hong undertook an interview of major industry insiders on the following topics.
Cobalt to Get Back to Fundamentals after Speculative Surges, SMM Reports
Ni-Co-Li Price Forecast
Recent lithium price gains are mainly driven by domestic new energy vehicle, said Zhang Jiangfeng, Secretary General of Lithium Branch of China Nonferrous Metals Industry Association (CNIA). China produced 300,000 new energy vehicles in 2015, and originally planned to produce 700,000 vehicles in 2016, but failed to meet this target due to crackdown on subsidy fraud. Canada-based RB Energy had planned to produce 20,000 tonnes of battery-grade lithium carbonate with spodumene concentrate produced by Quebec Lithium Inc. But production did not meet target due to raw material problem. Some foreign companies overstated their capacities.
After lithium prices rose in 2016, focus has been escalating on lithium mines both in China and abroad, especially in Australia, Africa and Chinese salt lake mines and Xinjiang’s lithium mines. Global total lithium ore capacity is estimated to be 300,000 tonne, sufficient to demand.Jiangxi Ganfeng Lithium Co.’s Mt. Marion, which is located in Australia, will release large amount of capacity this year. Galaxy Resources Limited restarted its mines. Both companies will contribute a total of over 30,000 tonnes of resources this year. When combined with China’s recycling and small projects overseas, global lithium supply will unlikely fall short of demand in the second half of the year.
Cobalt - The true consumption of cobalt mainly includes battery material, high temperature alloy, hard alloy and catalyst.
According to the 2016 research report published by the cobalt branch and other cobalt researchers, there will be a surplus of 2,000 tonnes in 2017. On recycling front, Co-Ni recycling will be focused due to high prices, while lithium recycling will be nebbish. Brunp recycling was the only recycler of lithium. With the improvement of recycling system, cobalt prices may return to rational level. Lithium supply is better compared to cobalt.
The Lithium Branch paid attention to the Jiajika lithium mine in Sichuan. It is jointly making a plan for the lithium industry in Ganzi Tibetan Autonomous Prefecture, Sichuan Province with Xinjiang Engineering & Research Institute of Nonferrous Metals Co. Guangzhou Youngy Investment Management Group Co. had over 40,000 tonnes of spodumene concentrate at one point, an equivalence of 5,000 tonnes of lithium carbonate. But the company did not restart after suspending production in 2014. Tianqi Lithium suspended production for debugging after acquiring TALISON Lithium. Sichuan Energy Industry Investment Group Co. intends to acquire Xingneng Group’s Sinuowei Mining and buid one 10,000-tpy lithium carbonate plant, which has passed the second publicity of environmental impact assessment. The three mines have yet to reach operation.
Lepidolite Capacity in Jiangxi
Lepidolite resources is now mainly in Jiangxi’s Yichun, said Zhang Jiangfeng. At present, companies engaging in lepidolite production include Jiangxi Yichun Silver & lithium, with a capacity of 3,000 tonnes. It produced 1,200 tonnes of lithium carbonate last year, and plans to produce 2,500 tonnes this year. Hzone, whose capacity is 10,000 tonnes, produced more than 2,000 tonnes of lithium carbonate last year. In addition, QiXing Optoelectronic Tech Co. is also doing such business.
Jiangxi Yun Lithium Material’s capacity planned in Xiushui County, Ganzhou City, Jiangxi Province is 20,000 tonnes. The first phase of 10,000 tonnes capacity was put into production last year.
Haiyuan Longzhou Lithium Industry has 5,000 tonnes of capacity in first phase which came online last year. Lanshi Group Limited Company plans to construct 30,000 tonnes of lithium carbonate capacities and 10,000 tonnes of lithium hydroxide capacities during 2017-2019. Among them, 6,000 tonnes of lithium carbonate and 2,000 tonnes of lithium hydroxide production capacities have been built this year. In addition, Dow Technology is expected to build 10,000 tonnes of lepidolite and lithium carbonate production line.
Lithium Recovery Costs & Recycling Value
Zhang said lithia contained in lithium ore is about 5.0-6.0% at present, with low lithium content. Lithium contained in lithium iron phosphate waste is currently about 4%. In fact, those with lithium oxide over 1% have recovery value. Many domestic enterprises have been involved in the field, such as GEM, Hunan Brunp. Besides, Tianqi Lithium industry, Ganfeng Lithium Industry and Jiangxi Yun Lithium Material are also doing lithium recycling. Lithium recovery last year should be more than 3,000 tonnes, and is expected to increase this year.
Xu Shiguo, deputy director of GEM's new-energy material research institute, expects cobalt recovery to be around 3,000 tonnes per year, and the main sources are dry batteries and circuits. The financial subsidy policy of cobalt recovery will affect the development of cobalt recovery industry, he said. Big gains of cobalt prices will stimulate the recovery market development. Lithium recycling is now benefiting from higher raw material prices.
National policy attaches great importance to challenges from energy density for lithium iron phosphate batteries
Tianjin STL Energy Technology Co.’s Chief Engineer Fan Yong said safety is the most important advantage of lithium iron phosphate. When coupled with its excellent cyclicity performance, lithium iron phosphate has an advantage in energy storage and coach industries. Ternary is the mainstream in passenger car field, though.
Xu Shiguo said: national policy of energy density requirements aims to promote development of motive battery industry. Currently, energy density requirements are greatly connected with technical cooperation. The correlation of subsidies and energy density is unfavorable for the balance of the industry, which ignores the advantage of ferrophosphorus.
Battery Lease Method from Renault
Xu said battery lease is a good operation way. Battery accounts for a high proportion in the cost of new energy vehicles. Battery lease helps save cost. Spending is very expensive when buying batteries which are sufficient to 5 years use. This will not be favorable for new energy vehicle consumption. Battery lease will promote development of the industry.
Do Tesla’s large volumes of shipments indicate a change in the supply system?
China’s output and sales were sluggish during January and February this year, Zhang Jiangfeng said. But Tesla has unexpectedly shipped 25,000 vehicles. Rumor has it that Tesla will change its 18650 battery system into 21700, reducing the number of batteries, with BMS weight lower. Total cost will fall 20%. Panasonic, one of the battery suppliers to Tesla, sourced high-Ni ternary raw materials from China. Chinese companies are the important raw material suppliers in precursor and lithium hydroxide for Tesla, including Jiangxi Yabao and Ganfeng Lithium Industry.
The Likelihood and Influence of Tesla Plant Construction in China
Xu said it will be favorable for China’s new energy vehicle industry if Tesla builds plant in China. China is still weaker in the field compared to Tesla. Tesla had a clear plan in model, performance, cooperation manufacturers and battery material system.
China put forward the 8Gwh entry requirements for motive battery plants last year, which required large investment at small and medium battery manufacturers. Imported equipment with 1Gwh capacity requires 500-600 million yuan. In contrast, 3C battery producers have high gross margin and stable liquidity. Motive battery plants suffer from long receivables collection period. Domestic motive battery plants should have long-term plan for development. China’s automobile output will top 2 million vehicles in 2020. Without subsidy, whether those vehicle manufacturers will survive remains a question after Tesla enters Chinese market.
2017 Market
The new energy industry is promising. Industry insiders should try their best regardless of subsidy in the future, said Xu.
Developing new energy vehicle industry is very important for China in the way to a strong automobile country. Domestic lithium ion battery industry is expected to boom.
Fan said the lithium battery industry is still young, which only has over two decades of development. Material’s performance and capacity will improve further.
For news cooperation, please contact us by email: sallyzhang@smm.cn or service.en@smm.cn.
![[Galan Lithium Announces Completion of Phase 1 Construction at HMW Project]](https://imgqn.smm.cn/usercenter/tKgKv20251217171725.png)
