SHANGHAI, Nov 16 (SMM) -
I. Ternary cathode precursor:
1. The supply security of nickel resources has become a key concern in the future. Given the overall transition to high nickel products, the industry is less sensitive to the supply, demand and prices of cobalt and manganese as a whole. The most popular deployment adopted by manufacturers is to achieve independence in terms of resource supply by deploying in nickel resources with supplement from other resources such as nickel briquettes.
2. Leading manufacturers will accelerate the integration of industrial chain. The precursor manufacturers may control the upstream nickel resources and build their own nickel sulphate production capacity to realise self-supply of raw materials for the precursors. It will facilitate the security of nickel supply, and save other intermediate costs such as nickel sulphate crystallization in order to improve the profit margins.
II. Ternary cathode materials:
1. The transition to high nickel materials is inevitable: (1) The high-end models is less sensitive to prices: In the short term, although lithium iron phosphate is superior in terms of market shares due to its cost advantage, the high-end models that mainly use high nickel prices are less sensitive to prices, thus there is still a demand for high nickel ternary cathode materials. (2) Great potential in cost reduction: After high nickel technology is upgraded, there is still a large room for cost reduction due to the decline in cobalt content and nickel prices. (3) The construction of charging and swapping facilities has not been fully developed, which results in higher requirement for car’s range: Currently, as the charging and swapping systems for new energy vehicles are underdeveloped, the customers will have higher requirements for NEVs’ range than oil-fuelled cars. Therefore, the advantages of high nickel materials in terms of range still exist.
2. Ternary cathode material manufacturers are currently focusing on high nickel materials for capacity expansion and business development. Compared with lithium iron phosphate, the cost advantage of the 5 and 6 series weakens when the lithium salt prices are high. In the future, it may be greatly squeezed by lithium iron phosphate: (1) Insufficient cost advantages: The space for cost reduction is limited because of the high cobalt content of 5 and 6 series. (2) The performance is similar with that of lithium iron phosphate: Since the performance of 5 and 6 series is similar with that of lithium iron phosphate while lags far behind that of high nickel materials, the replaceability and cost-effectiveness of lithium iron phosphate are superior to 5 and 6 series. Ternary cathode material manufacturers will shift the focus of future expansion and development to high nickel materials in order to enhance the irreplaceability of their products.
III. Cathode material:
BTR China
The current capacity of ternary cathode materials is 35,000 mt, and the 50,000 mt capacity of the joint venture with SK is expected to be put into production by the end of 2022.
Nantong Ruixiang
At present, the production of lithium manganese oxide (LMO) has been greatly reduced from 400 mt per month to more than 100 mt per month as a major client stopped relative businesses (original order of 300 mt/month). As the prices of lithium salt stand high at present, LMO has lost its advantages. And many customers even choose to replace it by ternary materials or others directly because of the high costs and low cost effectiveness.
Sinochem Hebei
Due to the low acceptance of price hikes by terminal car manufacturers, a few battery factories directly placed all orders until the New Year, forcing material factories to reserve raw materials and fix price increases in advance, which constrained the price hikes in material factories.
Ronbay Technology
High nickel materials will become the prominent trend in the future:
In the short term, high-end models are less sensitive to costs, and their demand for high-nickel ternary materials still exist.
After the technology is upgraded, the costs of high nickel will be reduced due to the decline in the costs of cobalt and nickel.
Currently, as the charging and swapping systems for new energy vehicles are underdeveloped, the customers will have higher requirements for NEVs’ range than oil-fuelled cars.
Guanghua Sci-Tech
China ranks second in phosphate ore reserves in the world, which is far from the reserves of the country that ranks first. Nonetheless, China is currently the country with the largest phosphate ore shipments. China's phosphate mining is mainly restricted by environmental factors, as the major mining areas are mainly located in Yunnan, Guichuan, Hunan and other places, adjacent to the Yangtze River. In addition, the current profit margin of phosphate ore is comparatively low, and the profit of iron phosphate is not enough to drive Chinese capitals to go to the country with the largest phosphate ore reserves for the shipment of ore or finished goods to China.
IV. Battery
SVOLT Energy
Recycling mode: car manufacturers will return old batteries to SVOLT in exchange for new batteries. SVOLT will then send the old batteries to Golden Tigher Cobalt Co. for recycling and extraction of salt, who can earn processing fees from SVOLT. After receiving the salt, SVOLT will ship it to the precursor and material factories for processing, and then take back the materials and produce them into new batteries for sale.
CATL
According to the current plan, the proportion of LFP and ternary products in 2022 is 6:4, but it will also be subject to overall orders. (Greater uncertainty)
V. Terminal sector
Xiaopeng Motors
In 2022, it plans to produce 300,000 vehicles per year with a monthly output of 30,000 vehicles.
