Lithium iron phosphate is too hot, even the cobalt material giants are "cross-border" to compete for food.

According to data from the Power Battery Application Branch, the installed capacity of power batteries for new energy vehicles in China was 159.59 GWH in 2021, of which the installed capacity of lithium iron phosphate batteries was 81.69 GWH, a substantial increase of 251.7% over the same period last year, with a market share of 51.2%. More than ternary batteries have become the first major technology route for power batteries in China.

A few days ago, Tesla CEO Musk, who had just been elected an academician of the American Academy of Engineering, made it clear that Tesla would gradually switch to the lithium iron phosphate battery scheme in the future. In the future, 2/3 of Tesla's batteries will use lithium iron phosphate, and 1/3 may use ternary batteries. Zeng Yuqun, chairman of Ningde Times, also said that in the next 3-4 years, Ningde era will gradually increase the production capacity of lithium iron phosphate batteries, while the proportion of ternary batteries will gradually decrease.

Citic Securities pointed out that at present, mainstream overseas new energy vehicle companies such as Tesla and Daimler have clearly defined the path of lithium iron phosphate battery. It is expected that other overseas car companies, such as BMW and Volkswagen, will also choose lithium iron phosphate battery matching scheme in their electrification path, and lithium iron phosphate battery is expected to achieve global support. With the launch of more models equipped with lithium iron phosphate batteries, the market demand for lithium iron phosphate batteries will remain strong for a long time.

The popularity of lithium iron phosphate batteries has attracted cobalt giants to join. On Feb. 7, Hunan Yacheng, a subsidiary of Hezhong Technology, completed 180 million yuan of strategic financing, and its investor is Huayou Group, which has long been mainly engaged in cobalt products. January 28, Hezhong Science and Technology announcement, Hunan Yacheng signed agreements with Huayou Cobalt and Huayou Holdings respectively, Huayou Cobalt intends to invest in it. After the completion of the deal, Hezhong Technology will hold 81.8% of Hunan Yacheng, Huayou Cobalt will hold 12.13% of Hunan Yacheng, and Huayou Holdings will hold 6.07% of Hunan Yacheng.

The partner strength chosen by Huayou Cobalt Industry is not bad. According to battery China, Hunan Yacheng mainly produces iron phosphate, cobalt tetroxide, cobalt hydroxide and other precursor products; the company is carrying out the development of a new generation of high-pressure solid-density iron phosphate and low-cost iron phosphate research and development. the high-pressure solid iron phosphate project developed in cooperation with Betteri and Guoxuan Tech has been mass produced, and the company's main customers are Beitri, Qinghai Taifeng, Anhui Guoxuan and so on.

At present, the market share of iron phosphate capacity of Hezhong technology ranks first in the domestic market. Hunan Yacheng, as a leading enterprise of domestic lithium cathode material precursor iron phosphate material, now has a production capacity of 60,000 tons per year, accounting for about 17% of the national iron phosphate output in 2021. At the same time, based on the strategic cooperation between Hezhong Technology and Huayou Cobalt and Huayou Holdings, it will help the company to further build a leading position in the industry.

In fact, the cooperation between Huayou and Hezhong Technology is even earlier. In August 2021, Hezhong Technology announced the strategic cooperation agreement with Huayou Holdings. The cooperation is mainly in iron phosphate: 1) increase investment in Sichuan Yacheng Iron Phosphate Project; 2) the purchase volume of Huayou shareholding is not less than 70% of the project output. Yacheng supplies no less than 70% to Huayou shareholding.

In December 2021, Hezhong Science and Technology said that Hunan Yacheng signed a "joint venture contract" with Huayou Cobalt Industry, and the two sides planned to jointly invest in the construction of an "annual production capacity of 300000 tons of battery-grade iron phosphate integration project" in Weng'an County, Qiannan Prefecture, Guizhou Province. relying on the rich phosphate resources in Weng'an County, Qiannan Prefecture, Guizhou Province, jointly create the advantages of lithium iron phosphate material new energy industry.

Since it is ambitious to cut into iron lithium, then the layout of Huayou Cobalt Industry is far more than the cooperation with Hezhong Technology. In November 2021, Huayou Cobalt announced that its controlling subsidiary Bamo Technology intends to acquire a 100% stake in Inner Mongolia Sheng Vanadium. It is reported that Inner Mongolia Sheng Vanadium is a professional material supplier focusing on the research, development, production and sales of lithium battery cathode materials. The company has planned an annual output of 75000 tons of lithium iron phosphate cathode materials project, of which the first phase of 15000 tons annual production capacity project will be put into production in 2019. The second phase of 25000 tons annual production capacity project will be put into production by the end of 2021. The third phase of 35000 tons annual production capacity project has started construction and is expected to be put into production in mid-2022.

In addition, Huayou Cobalt signed a framework agreement with Xingfa Group in November 2021 to jointly invest in the integrated industry of phosphate rock mining, phosphorus chemical industry, wet-process phosphoric acid, iron phosphate and lithium iron phosphate in Yichang, Hubei Province. construction of 500000 tons / year of iron phosphate, 500000 tons / year of lithium iron phosphate and related supporting projects.

In December of the same year, Huayou Cobalt Industry issued a cooperation progress announcement that the two sides planned to jointly invest 300 million yuan to set up Hubei Xingyou, with the joint venture company as the main body, to invest in the construction of 300000 tons / year iron phosphate project in Yidu, Yichang City, which will be built in stages. The first phase of the project is 100000 tons / year iron phosphate project.

It is not difficult to see that Huayou Cobalt Industry's investment in lithium iron phosphate is not small. It is reported that since 2021, Huayou Cobalt Industry has continuously improved the layout of the industrial chain around the upper control resources, mid-lift capacity and downward market, realizing the development of ternary + lithium iron phosphate double system, and wants to gradually transform from cobalt industry to lithium material industry. Zhongtai Securities pointed out that Huayou Cobalt has now grown into the world's largest cobalt smelter, with a market capitalization of more than 100 billion yuan. In recent years, the company continues to deepen the industrial chain, is constantly leaping forward to the leader of lithium materials.

According to the Wood Mackenzie research report, cost and safety will continue to be the first factors that battery suppliers need to consider in a variety of battery application scenarios. Lithium iron phosphate is expected to become the dominant energy storage chemical in the next 10 years, and will gradually occupy a dominant position in the field of electric vehicles after gaining a foothold in the energy storage market.

In fact, due to the advantage of getting the moon first, many chemical enterprises have already carved up the big cake of lithium iron phosphate. According to the current situation, there will be more and more giants "cross-border" layout of iron lithium in the future.