Lithium iron phosphate "new player" accelerates entry

The upsurge of crazy addition of lithium iron phosphate by phosphorus chemical enterprises continues. On February 21, the domestic phosphorus chemical giant Chuanfa Dragon Python announced that the company intends to invest 12 billion yuan in the construction of Deyang Chuanfa Dragon Python Lithium Power New Energy material Project in Mianyang, Sichuan Province, with a wholly-owned subsidiary Deyang Chuanfa Dragon Python New material Co., Ltd. the main project is to build an annual output of 200000 tons of lithium iron phosphate, 200000 tons of iron phosphate and supporting products.

A week before this, the first phase of the lithium-ion battery material industrialization project with an annual output of 200000 tons invested by Longbai New Materials, a wholly-owned subsidiary of Longbai Group, has been completed and is now in the stage of trial production. The layout of Longbai Group in the field of lithium materials shows the characteristics of "large chemical industry" and "large-scale". Since August 2021, the company has planned and built a total of 350000 tons / year of iron phosphate and 350000 tons / year of lithium iron phosphate projects.

It is worth noting that the recent accelerated layout of lithium iron phosphate materials of the "new players" far more than the above two. Since 2022, New Yangfeng and Green Mei have signed the "phosphorus Resources Chemical Industry chain Integration Strategic Cooperation Framework Agreement"; Fengyuan shares plan to raise a total of no more than 940 million yuan for the "annual production base project of 50, 000 tons of lithium battery lithium iron phosphate cathode materials"; Wanhua Chemical has an annual production capacity of 50, 000 tons of lithium iron phosphate cathode materials project, with a total investment of 1.5 billion yuan.

Earlier, Yuntianhua planned to invest 7.286 billion yuan in October last year to build 500000 tons / year iron phosphate battery precursors and supporting projects; Hubei Yihua and Ningde era's Ningbo Bangpu joint venture company to build and operate iron phosphate, nickel sulfate and its front-end phosphate rock, phosphoric acid, sulfuric acid and other chemical raw materials; Xingfa Group and Huayou Cobalt Industry invested 500000 tons / year of iron phosphate and 500000 tons / year of lithium iron phosphate and related supporting projects in Yichang, Hubei Province.

According to China's understanding of the battery, the main manufacturers of lithium iron phosphate in China are Hunan Yuneng, German Nano, Hubei Wanrun, Chongqing Teri, Peking University and so on. Data from Hunan Yuneng's prospectus show that Hunan Yuneng and German Nano had a market share of 25% and 24% respectively in 2020, followed by Hubei Wanrun and Beitri, with a market share of 17% and 14%, respectively.

From the perspective of the market pattern of lithium iron phosphate, the share of the first four enterprises is as high as 80%, and the degree of concentration is very high. So, why do phosphorus chemical enterprises still have to "cross the border"? In this regard, the market pointed out that phosphorus chemical enterprises to expand the capacity of lithium iron phosphate, the future is mainly cost competition. Haitong Securities Research News also analyzed that phosphorus chemical enterprises have significant advantages in entering lithium iron phosphate, which on the one hand has the advantage of raw material cost, on the other hand, it can also provide raw material guarantee for the large-scale development of lithium iron phosphate.

It is well known in the industry that iron phosphate is an important raw material for the production of lithium iron phosphate. It is understood that in the current lithium iron phosphate materials, the cost of iron phosphate as a precursor accounts for about 30%, 40%, of which the phosphorus source of iron phosphate accounts for about 50% of the total cost of iron phosphate, so the phosphorus chemical industry has become an important part of the market for lithium iron phosphate cathode materials.

"Phosphoric acid currently accounts for 70% of the cost of iron phosphate, so it is the main factor affecting the price of iron phosphate. It is estimated that the cost of iron phosphate factory without raw material advantage is 12600 yuan / ton, that of iron source advantage is 11800 yuan / ton, and that of phosphorus source advantage is 11000 yuan / ton. " A domestic institutional analyst pointed out that in the iron phosphate link, the cost advantage of phosphorus chemical enterprises is more prominent.

In recent years, benefiting from the increasing production and sales of new energy vehicles, the installed capacity of power batteries has increased significantly. Due to the gradual decline of subsidies, the price advantage of lithium iron phosphate is becoming increasingly prominent. Hua an Securities Research News pointed out that in terms of cathode materials, lithium iron phosphate can reduce cost by 65% Muth72% compared with ternary batteries; even if the limit calculation of cobalt-free and ternary price is taken into account, the cost of lithium iron phosphate is still significantly better than ternary, with 55% and 22% cost reduction advantages in cathode and battery, respectively.

In particular, with the emergence of the industrial application of new technologies such as BYD blade battery technology and Ningde era CTP technology, the performance of lithium iron phosphate battery has been greatly improved, the energy density will be increased, and the cost advantage will be further highlighted, so lithium iron phosphate battery has re-occupied the advantage in the ratio of performance to price, and the market scale is growing rapidly.

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. According to the data in January this year, the output and installed capacity of lithium iron phosphate continued to exceed that of ternary batteries, and the growth rate was significantly higher than that of ternary batteries.

Due to the strong market demand for lithium iron phosphate batteries, the prices of lithium iron phosphate related products also continue to rise. Data show that at the beginning of 2021, the price of iron phosphate is still 12000 yuan / ton. After that, it rose all the way, reaching a high of 27000 yuan / ton this year, an increase of 125%. The current price is maintained at about 23000 yuan / ton. Lithium iron phosphate has risen from less than 40, 000 yuan / ton at the beginning of 2021 to more than 140000 yuan / ton today, an increase of 250%.

In the long run, under the policy background of China's carbon neutral and long-term strategic goals, it is expected that the production and sales of new energy vehicles will continue to increase, and the shipments of lithium iron phosphate batteries will continue to grow, and the industry expects that the market demand for lithium iron phosphate will continue to grow at a high speed.

However, it is worth noting that there may be structural overcapacity due to the rapid expansion of capacity in recent years due to the influx of capital into the lithium iron phosphate industry. According to incomplete statistics in the industry, the scale of expansion of lithium iron phosphate announced by various manufacturers at present, coupled with the existing production capacity has exceeded 5 million tons / year, obviously exceeds the demand in 2025, so relevant enterprises must pay enough attention to it.