SHANGHAI, Jun 17 (SMM) -
On the evening of June 14, Zhejiang Huayou Cobalt Co., Ltd. announced that in order to further concentrate advantageous resources, improve the efficiency of capital use, and focus on the new energy lithium battery ternary material industry chain, the company terminated the acquisition through its holding subsidiary Tianjin B&M with 100% equity of Shengfan Technology.
Huayou Cobalt is mainly engaged in the R&D and manufacturing of new energy lithium battery materials and cobalt new material products. On November 5, 2021, Tianjin B&M, a holding subsidiary of Huayou Cobalt Company, and Huayou Holdings, the controlling shareholder of the company, signed the Letter of Intent for Equity Acquisition. Tianjin B&M plans to pay Huayou Holdings in cash or issue new shares to acquire its 100% stake in Shengfan Technology to expand the LFP business.
It is worth noting that as early as last year, Huayou Group Holdings, the parent company of Huayou Cobalt, completed the acquisition of Inner Mongolia Shengfan Technology, a LFP enterprise, and is currently the 100% controlling shareholder of Shengfan Technology. Tianjin B&M is a subsidiary of Huayou Cobalt, and is wholly-owned by Huayou Group. Tianjin B&M’s intention to acquire Inner Mongolia Shengfan from Huayou Holding Group was more of a business sector adjustment within the Group. It was carried out with the intention of integrating the cathode material business of the Group, realising industrial synergy and optimising resource allocation. .
Therefore, although Huayou Cobalt stated in this announcement that the company intends to further concentrate its advantageous resources, focus on the new energy lithium battery ternary material industry chain, accelerate the layout of upstream nickel, cobalt and lithium resources and the development of downstream products, and terminate the layout of LFP materials, this is only for Huayou Cobalt Industry, and does not mean that Huayou Holdings has given up the LFP business.
According to previous data, in terms of motive power battery technology, two types of batteries, ternary materials and lithium LFP, have almost occupied more than 95% of the power battery market share in recent years. Which type of the battery is the final answer has been debated in the industry. Since last year, the growth rate of LFP battery shipments has far exceeded that of ternary lithium batteries, which have dominated the market for many years. LFP is gaining popularity with its cost advantages, long life and safety.
As large battery factories, such as Guoxuan Hi-Tech, BYD, Yiwei Lithium, etc. have increased their production capacity of LFP, new companies have also laid out the production of LFP, and the output of LFP supply end has accelerated significantly. According to SMM estimates, the annual output of LFP is expected to reach 780,000 mt in 2022, but there may be hidden risk of overcapacity. At this time, the cost and quality will become the key. As a new LFP enterprise, the production of LFP is not only about the quality control, but also needs to bear the risk of capital chain caused by the price increase of lithium salt in upstream.
