Round-Up of News in Ni-Co-Li Industry Chain and SMM comments

SHANHGAI, Aug 30 (SMM) – The followings are round-up of news in Ni-Co-Li industry chain in the week ended August 27 and SMM comments.

News 1: Hainan Mining announced on August 23 that it plans to invest as much as 1.065 billion yuan in the first phase of Hainan Xingzhihai New Materials Co., Ltd.'s 20,000 mt battery-grade lithium hydroxide project. Construction of the project is expected to take one and a half years, including the procurement and transportation of spodumene as raw material, construction of 20,000 mt/year battery-grade lithium hydroxide production line, as well as supporting public facilities and auxiliary equipment.

SMM comment: Lithium hydroxide processing is a high-tech industry, and this project could take advantage of the tax incentives under the Hainan Free Trade Port policy. With closer vicinity to Australia, the main producer of spodumene, location in Hainan will give the project significant logistics advantage over projects in Jiangxi and Sichuan, which are the main production areas of lithium hydroxide. To the west of the Oriental Industrial Park lies the Beibu Gulf waters, and to the north-west stands the Basuo Port, which is one of the largest deep-water ports in Hainan and has opened many domestic and foreign routes, providing convenient transportation and significant transportation cost advantages to the project.

News 2: The Ministry of Industry and Information Technology (MIIT) said that relevant departments will support the acceleration of sodium-ion battery innovation and mass production of leading products. The MIIT will also improve the relevant product catalogue as appropriate and promote the application of sodium-ion batteries that have excellent performance and meet qualifications in the fields of new energy power stations, vehicles, communication base stations, etc. The MIIT will also promote the full commercialisation of sodium-ion batteries through the collaborative innovation among industries, universities and research institutions.

SMM comment: The sodium-ion battery is still in the nascent stage of industrialisation. The upstream and downstream enterprises of the industry chain have not yet realised mass production. The sodium-ion battery released by the CATL earlier are more competitive than other batteries in fields that require lower energy density, such as energy storage and low-speed vehicles, by relying on its low price, super long cycle, fast charging performance that is much superior than NCM and LFP batteries, as well as higher-than-expected energy density. Once the proposals of the MIIT are implemented, the industrialisation of sodium-ion batteries will be greatly advanced.

News 3: General Motors announced on August 20 that it will expand the recall of Chevrolet Bolt EV models and recall all Bolt models due to the fire risks of high-voltage batteries. This move will cause the company to suffer a loss of $1 billion.

SMM comment: The battery used in the Bolt model may have two rare defects: one is the damage of the battery cathode, and the other is the wrinkles of the battery separator. As both of these defects will increase the risk of fire, General Motors decided to recall the relevant models. The latest recall involves a total of 73,000 vehicles. The previous recall has caused a loss of $800 million to the company. As the battery supplier to General Motors, LG New Energy will need to bear high recall costs and its IPO process will also be negatively affected.