SHANGHAI, Aug 9 (SMM) - A weekly update on the trending stories from the New Energy sector.
1. Guoxuan Hi-Tech signed a agreement with the government of Yifeng county in Yichun city on August 3 and another agreement with the government of Fengxin county, also in Yichun, on August 4, paving the way for the construction of Guoxuan Hi-Tech’s lithium carbonate projects. Once fully operational, these two projects are expected to produce 100,000 mt of lithium carbonate annually, with an annual output value of over 10 billion yuan.
The project in Yifeng will be constructed in two phases. The first phase mainly includes 20,000 mt/year lithium battery material capacity and 3 million mt/year mining and dressing capacity. The second phase mainly includes 30,000 mt/year lithium battery material capacity and 5 million mt/year mining and dressing capacity. After reaching full production, the project is expected to achieve an annual output value of 5 billion yuan. The first phase of the project will start construction in Q3 2021 and be put into production before the end of 2022.
2. According to the Nihon Keizai Shimbun, SK Innovation, a well-known battery manufacturer in South Korea, recently announced that it plans to spin off its battery business into an independent unit to better focus on the rapidly growing electric vehicle market. After the announcement, the stock price of SK Innovation fell by as much as 7.9%, a record low since April 2021. Market analysts said that battery business is an important source of revenue for SK Innovation and the company will only own petrochemical businesses with lower profitability after the spin-off.
LG, another South Korean company, split its battery business and established LG Energy Solution to focus on the development of power batteries, energy storage batteries and other businesses. LG Energy Solution is expected to go public in Q3, and the funds raised may be as much as $10-12 billion, setting the record for the largest IPO in South Korea. Most power battery manufacturers have substantially expanded their production. SK Innovation is likely to adopt the same strategy as LG by raising funds for expansion of battery production capacity and increasing market share following the spin-off of its battery business.
3. CATL has become a new shareholder of Jiangxi Shenghua New Materials, and the registered capital of the latter has increased from 220 million yuan to 676 million yuan, an increase of 207.27%.
CATL has become the third largest shareholder of Shenghua New Materials, holding a 2.9586% stake in the latter and with the share of final beneficiary at 6.8082%. Shenghua New Materials is currently mainly engaged in the production of lithium iron phosphate (LFP). Demand for LFP has increased significantly since the second half of last year, and capacity is insufficient, leaving supply tight. The acquisition will help ensure the stable LFP supply to CATL.