4 billion! Jiangxi sublimation, a subsidiary of Fulin Seiko, plans to build an annual lithium iron phosphate project with an annual production capacity of 250000 tons.

On the evening of July 20th, Fulin Seiko (300432) announced that Jiangxi sublimation New Materials Co., Ltd., a subsidiary of the company, plans to increase investment in the construction of an annual output of 250000 tons of lithium iron phosphate cathode material project, with an estimated total investment of 4 billion yuan.

Fulin Seiko said that in view of the rapid development trend of the new energy lithium electricity industry and the industry pattern of cathode materials, in order to meet the product supply needs of core customers, further optimize the production capacity layout of lithium iron phosphate cathode materials, further expand the market scale of the company's lithium iron phosphate cathode materials products, and enhance the company's capacity scale, sustainable profitability and comprehensive competitiveness.

On the same day, Fulin Seiko announced that in view of Jiangxi sublimation's planned new investment in the construction of 250000 tons of lithium iron phosphate cathode material project, Jiangxi sublimation signed a "strategic cooperation agreement" with Sichuan Luran Science and Technology Group Co., Ltd., Sichuan Shehong Economic Development Zone Management Committee after friendly consultation, Jiangxi sublimation plans to invest in a new 60, 000 tons of lithium iron phosphate cathode material project in Shehong western international technical cooperation industrial park. The project is the first phase of the planned annual output of 250000 tons of lithium iron phosphate cathode material, with a total investment of 1.06 billion yuan.

According to public data, Fulin Seiko was founded in 1997 and has formed six industrial pillars with precision hydraulic, electromagnetic drive, electronic drive, electric vehicle drive system, advanced sensors and battery cathode materials as the core. The company's main customers cover American General Motors, SAIC General Motors, Volkswagen, Audi, Peugeot Sitron, Renault, Mitsubishi, Ford, Toyota, Jaguar Land Rover and other international brands, as well as domestic mainstream brands such as SAIC, Guangzhou Automobile, BAIC, Changan, Geely, Dongfeng, Great Wall and so on.

In December 2016, Fulin Seiko acquired a 100% stake in sublimation for 2.1 billion yuan. The main products of sublimation technology are lithium iron phosphate series and NCM613 ternary materials, which are used in the field of new energy vehicle power battery and energy storage. The information on the sublimation science and technology website shows that it has three production and R & D bases in Yichun, Sichuan and Zhuzhou, Hunan, with a production capacity of 65000 tons of lithium iron phosphate, 3000 tons of ternary materials, more than 500 employees and total assets of more than 1 billion yuan.

Battery Network noted that Fulin Seiko issued an announcement in January this year that the company plans to increase its capital by 272 million yuan in Jiangxi sublimation; the Ningde era will directly increase its capital by 20 million yuan, and has the right to choose to increase another 44 million yuan (within 18 months from the date of delivery of this capital increase); Changjiang Morning Road New Energy Industry Investment Partnership will increase its capital by 164 million yuan. The funds obtained from this capital increase will all be used for Jiangxi sublimation to build a new project with an annual production capacity of 50,000 tons of new energy lithium cathode materials in Shehong City, Sichuan Province. After the completion and production of Sichuan Shehong project, its products give priority to meet the procurement needs of Ningde era, expand the market scale of the company's lithium cathode materials, and enhance the company's overall competitiveness and sustainable profitability.

It is reported that Jiangxi sublimation has already entered the supply system of Ningde era: Fulin Seiko announced on September 30, 2020 that Jiangxi sublimation has signed a plan agreement with Jiangsu Times (a subsidiary of Ningde era). It has been identified as the supplier of lithium cathode materials in Jiangsu era, and both sides have officially entered the supply stage. Jiangsu Times will purchase the cathode active material lithium iron phosphate from Jiangxi sublimation with an effective period from September 28, 2020 to October 28, 2021.

In terms of market demand, the demand for lithium iron phosphate in the field of power batteries is growing rapidly. BYD said in a recent survey of reception agencies that as of June this year, the cumulative sales of the "Han" series had exceeded 90,000, including more than 50,000 in the first half of this year. In addition to the company's flagship model "Han", all of the company's pure trolley departments have been replaced with blade batteries. The blade battery is a new generation of lithium iron phosphate battery launched by BYD in March last year.

According to data released by the China Automotive Power Battery Industry Innovation Alliance, the number of power batteries installed in China totaled 52.5 GWH from January to June, up 200.3% from the same period last year. Among them, the total loading of ternary batteries was 30.2 GWH, accounting for 57.5% of the total loading, up 139.0% over the same period last year, and the total loading of lithium iron phosphate batteries was 22.2GWH, accounting for 42.3% of the total loading, up 368.5% over the same period last year.

According to a recent research report released by CITIC, assuming that the global penetration rate of lithium iron phosphate plus energy storage reaches 40 per cent in 2025, it is estimated that the global demand for lithium iron phosphate is expected to increase from 130000 tons in 2020 to 2.07 million tons in 2025, with a compound growth rate of 73 per cent. According to incomplete statistics, only the future expansion capacity of domestic iron phosphate and lithium iron phosphate has reached 204.5 and 2.669 million tons respectively, with both supply and demand breaking out.

In terms of price, according to the news released by Longzhong Information on July 20, at present, the leading enterprises of lithium iron phosphate are in full production, the energy storage market is mainly stable, and the demand growth of the power market is stable. The mainstream quotation of dynamic lithium iron phosphate is between 4.8yuan and 52000 yuan per ton.