An Interpretation of the Four Modes of Lithium Battery Positive Material Market in 2018

Due to the adjustment of subsidy policies and the fluctuation of raw materials prices, there have been many changes in the field of positive materials.

Since the second half of 2017, the positive material market has shown that: lithium iron phosphate material is cold, and product prices and gross margins have dropped significantly; The demand for ternary materials rose rapidly, and cobalt prices soared to increase the price of ternary; The amount of subsidies is linked to the energy density, and high nickel three yuan will become the mainstream in the future; Three elements and lithium manganate doping reduce cost, three element material replaces lithium cobalt acid; The commercialization of new cathode materials has accelerated, and the specific changes are as follows:

01 Material enterprise net profit polarization ternary upward lithium iron downward

Affected by the adjustment of subsidy policies, ternary batteries with higher energy density advantages have won the favor of more mainframe factories, and the market share of ternary power batteries has increased rapidly to directly drive the growth of ternary material production and sales. At the same time, the supply of cobalt raw materials in the upper reaches is scarce and mainly depends on imports. The sharp increase in cobalt prices directly contributes to the increase in the price of ternary materials, and the volume price increases to increase the net revenue of ternary materials companies. The lithium iron phosphate material is due to energy density bottleneck, the market demand has dropped significantly, while the high price of lithium carbonate in the upstream raw materials has led to a decline in the gross profit rate of lithium iron phosphate material, resulting in no increase in the income of lithium iron phosphate material companies.

High-tech lithium battery has been found in the 2017 annual report and the 2018 semi-annual report of the listed company, including Dangsheng Technology, Shanshan, Keheng, Xiamen Tungsten, and other ternary materials companies, which have ushered in several times the net profit of the company. The development trend of the company, while the main products of lithium iron phosphate materials, such as Anda Technology, Jin Li Technology, Ou Sai Energy, Yantai Zhuoneng, etc., suffered a sharp decline in net profit, showing a trend of polarization.

According to research data from the Institute of Li-ion Research and Production (GGII), the total shipment of domestic cathode materials in the second quarter of 2018 was 64,100 tons, an increase of 13.7 % year-on-year. Among them, ternary materials rose 52.1 % year-on-year, and lithium iron phosphate fell 33.6 % year-on-year. ternary materials became the main driver of the market growth of positive materials.

02 De-cobalt the power cell, obviously high nickel.

Due to the direct connection between the number of subsidies and energy density and the urgent impact of the demand for the energy density of power batteries, battery companies, and main machine factories are currently moving from NCM523 to NCM622 and NCM811/NCA in order to obtain more subsidies. Under the pressure of increasing raw materials and decreasing downstream subsidies, the tendency of denitrification of ternary power batteries is obvious, and high-nickel ternary positive materials become the optimal solution at present.

At present, companies including Hunan Sequoia, Dangsheng Technology, Ningbo Rongbai, and Tianjin Bamo have successively mass-produced high-nickel ternary positive materials, and the application of high-nickel 811/NCA materials in the power battery market in the first half of 2018 has gradually started. It is expected that between 2019 and 2020, more positive material companies will mass-produce high-nickel ternary materials, and downstream market demand will further increase, thus accelerating the replacement process of high-nickel ternary NCM523 and NCM622.

03 Material Substitute Tide in 3C Area for Cost Reduction of Three-way Manganese Dioxide

Although the continuous increase in the demand for ternary materials market led to the growth of material companies, the continued high price of ternary materials has reduced the profit space of a large number of battery companies. In pursuit of the dual goal of energy density and cost reduction, the three-element doped lithium manganate positive material scheme has become a feasible choice for many power battery companies.

According to the customer's requirements for cost, the battery plant can set the doping ratio of lithium manganate to 8:2, 7:3, or even 5:5, and the cost reduction space can range from 5 % to 15 %.

It is understood that after the addition of manganese to the ternary material, it will have a positive effect on the reduction of the cost, improvement of safety, and improvement of the doubling rate of the positive material. Under the condition that cobalt price maintains the high price for a long time, the power battery company's attempt to explore or continue to heat up in the aspect of ternary doped manganese.

In the power field, ternary doped manganese can be an effective way to reduce costs, while in the field of consumer products with small capacity requirements and low-performance requirements, lithium battery companies are actively seeking materials that can replace lithium cobalt acid. Including ternary, multivariate composite, and lithium manganese acid materials.

At present, mainstream positive materials companies such as Dangsheng Technology and Ningbo Rongbai are actively developing related multiple materials. The company also said that several high voltage and high-magnification multivariate materials developed by the company have been used in downstream customers instead of lithium cobalt acid.

04 Accelerated commercialization of new cathode materials

In terms of increasing the energy density of batteries, it is necessary to achieve the country's goal of achieving a single unit of 300 Wh/kg in 2020 and a system of more than 220 wh/kg. High nickel positive and Silicon carbon negative poles are currently recognized in the industry. However, to further achieve the goal of 350 wh/kg or even 400 wh/kg, it is necessary to find a new generation of positive materials, in which lithium-rich manganese is widely favored.

Prior to this, the industry has been engaged in the industrialization of lithium-rich manganese-based materials, but it has not been able to break through the commercialization of lithium-manganese based batteries. However, since 2018, this situation has changed significantly.

At the end of 2017, Zhejiang Aoyou Power System Co., Ltd. (hereinafter referred to as “Aoyou Power”) released a lithium-rich manganese-based power battery that can be industrialized. It has been stably mass-produced at 200-220Wh/kg, and is expected to produce energy density in 2018. Up to 250Wh/kg.

In May 2018, Aoyou Power announced that its first lithium-rich manganese power battery passed the National inspection. This is also China's first lithium-rich manganese power battery to pass the National inspection.

In July, the Ministry of Industry and Information Technology issued the 310th batch of "Road Motor Vehicle Manufacturers and Products Announcement", and Aoyou Power provided a pure electric box for Xinri (Wuxi) Development Co., Ltd. and Jiangsu Ludi Fangzhou Zhouxin Energy Vehicle Co., Ltd. The logistics vehicle is equipped with its lithium-rich manganese-based battery independently researched and developed, which realizes the first supporting application of lithium-rich manganese-based battery in the field of new energy vehicles.

At the same time, Aoyou Power also signed a strategic procurement agreement with Chery Commercial Vehicles. Chery plans to purchase no less than 10,000 sets of Lithium-rich manganese batteries from Aoyou in 2019, which means that Lithium-rich manganese batteries are about to be commercialized on a large scale.

In this case, the commercialization process of new positive materials including high voltage and lithium nickel acid may accelerate.

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