High nickel battery triggers a frenzy of lithium hydroxide "carving up"

The rapid increase in the permeability of high-nickel batteries has triggered a nickel war among giants such as Tesla, Ningde era, BYD and Yiwei Lithium Energy. At the same time, the industry's frenzy of carving up lithium hydroxide is also becoming more and more fierce.

A few days ago, Ganfeng Lithium Industry signed an agreement with the Jiangxi Fengcheng Municipal Government to build a new energy material project with an annual output of 50, 000 tons of lithium electricity, including an annual output of 25000 tons of lithium hydroxide in the first phase. At present, Ganfeng Lithium Industry controls eight high-quality lithium resources worldwide. By the end of 2021, Ganfeng Lithium Industry will have a lithium hydroxide production capacity of 81000 tons, ranking first in the world at that time. Ganfeng Lithium Industry has more plans in the future.

It is not a unique instance, but has its counterpart. Two months ago, Tianhua Super Clean raised 780 million yuan, which will also be used for the construction of lithium hydroxide project, which is mainly built by the company's Tianyi lithium industry. after the completion of the project, the battery-grade lithium hydroxide production capacity will be increased by 25000 tons per year. It is reported that Tianyi Lithium Industry will have a total planned capacity of 100000 tons / year of battery-grade lithium hydroxide by 2024, which will become an important global supplier of lithium hydroxide.

In addition, Wang Pingwei, chairman of China Mineral Resources, recently said that the company's new production line with an annual capacity of 25000 tons of battery-grade lithium hydroxide is expected to be put into production in the second half of 2021. The first phase of the 30, 000-ton battery-grade lithium hydroxide production line is expected to be completed in 2022, and the second phase of the 20, 000-ton battery-grade lithium hydroxide project is expected to be completed in 2023.

In fact, the race to expand production of lithium hydroxide began to accelerate as early as last year. Ronghui Lithium Industry Branch Entrepreneurship IPO plans to raise 924 million yuan for the "annual production of 68000 tons of battery-grade lithium hydroxide" and other projects; Ganfeng lithium hydroxide project will be put into production in Jiangxi, which will increase the annual production capacity of 50, 000 tons of battery-grade lithium hydroxide; Weihua shares plan to build an annual production capacity of 30, 000 tons of lithium hydroxide through its wholly-owned subsidiary Shengxin Lithium Industry; Ya'an Lithium Industry annual production of 20, 000 tons of lithium hydroxide project will be officially put into production.

Supply shortfall of 170000 tons

At present, whether it is the domestic Ningde era, BYD, Yiwei Lithium Energy, Guoxuan Tech, Lishen Battery, Fu Energy Technology, Bike Power, Penghui Energy, or foreign LG Chemistry, Panasonic, SKI, Samsung SDI and many other power battery manufacturers are in the layout of high nickel products, including NCM811/NCA, and even nickel 90%NCMA batteries.

Securities research institutions believe that among the major new cars listed at home and abroad in 2021, the proportion of vehicles equipped with ternary high-nickel batteries is relatively high, including popular models such as Tesla Model Y/Cybertrunk, Volkswagen ID.4/ID.6, Nissan Ariya, etc., which is expected to lead to a further increase in the permeability of high nickel in ternary materials. It is estimated that the permeability of high-nickel ternary materials will reach more than 60% and 70% by 2025.

Lithium hydroxide is the key material for the manufacture of high nickel batteries. Generally speaking, the high nickel material must be synthesized at high temperature in the pure oxygen environment, the kiln material must be resistant to oxygen corrosion, and the sintering temperature should not be higher than 800 ℃. Compared with lithium carbonate, the preparation of high nickel ternary materials from lithium hydroxide has higher energy density and better charge-discharge performance.

In the future, the substantial increase in high nickel ternary permeability will quickly boost the demand for battery-grade lithium hydroxide, which will exceed 550000 tons by 2025. However, although the pace of global lithium hydroxide production has accelerated significantly in the past two years, there is still a static gap in the planned total production capacity of major manufacturers until 2025, with a supply gap of about 70,000 tons.

The giant 02 set off a frenzy of carving up

In this context, lithium hydroxide is increasingly becoming the object of competition among the giants of the global battery industry chain. In order to ensure a stable supply of raw materials, giants are actively purchasing raw materials.

The Tianhua super-net increase mentioned earlier, and the Ningde era also participated in it, with an allocation of 120 million yuan, and the intention of hunting lithium hydroxide was very obvious. In fact, as early as two years ago, Ningde era signed a cooperation agreement with Tianyi Lithium Industry. From November 2019 to November 2024, Ningde era will give priority to purchasing lithium carbonate and lithium hydroxide products from Tianyi Lithium Industry; Tianyi Lithium Industry will give priority to meet the procurement needs of Ningde era and ensure supply.

At the end of last year, Tesla signed a supply contract for battery-grade lithium hydroxide with Ya'an Lithium Industry, a subsidiary of Yahua Group, agreeing that Tesla would purchase battery-grade lithium hydroxide products worth a total of US $630 million-880 million from Ya'an Lithium Industry from 2021 to 2025. This means that Tesla locked the lithium hydroxide production capacity of the next five years to Yahua Lithium Industry.

In addition to Yahua Group, Tesla also signed a purchase order for battery-grade lithium hydroxide with Ganfeng Lithium Industry. Early last year, Ganfeng lithium said that Tesla purchased about 20% of the company's annual lithium hydroxide production capacity. According to the agreement, Tesla designated his battery supplier to purchase battery-grade lithium hydroxide products from Ganfeng Lithium subsidiary.

Recently, it was reported that LG, which will supply NCMA batteries to Tesla, has also turned on lithium hydroxide panic buying mode for a long time. Three years ago, LG Chemical signed a supply contract with Ganfeng International to purchase 92600 tons of lithium hydroxide and other products from Ganfeng Lithium Industry from 2019 to 2025. Last year, LG Chemistry planned to buy fine ground lithium hydroxide from Zhiyuan Lithium Industry. In addition, LG Chemical has reached a long-term agreement with SQM, a subsidiary of Tianqi Lithium Industry, that SQM will supply battery-grade lithium carbonate and lithium hydroxide to LG Chemical from 2021 to 2029, totaling about 55000 metric tons of lithium carbonate equivalent.

In addition, Volkswagen, Europe's most aggressive electric carmaker, has signed a strategic supply agreement with Ronghui Lithium Industry for 10 years from 2022. Ronghui Lithium will supply lithium hydroxide products to manufacturers in Volkswagen's designated primary supply chain based on Jiujiang and Yichang.

Due to strong market demand, the price of lithium hydroxide has continued to rise since last year. According to industry data, by the end of last month, the price of domestic lithium hydroxide had reached 90,000 yuan per ton; it has risen for more than 20 consecutive weeks this year, with a cumulative increase of more than 80%. Industry insiders predict that the price of lithium hydroxide will continue to rise in the future, and the supply of lithium hydroxide will remain tight during the peak demand season in the second half of this year.