The truth or the rumor? The industry's move away from nickel and cobalt will lead to the closure of battery factories

"The price hike of upstream raw materials in 2017 has put battery manufacturers under pressure." Shenzhen bike battery co., LTD. Business management center vice President li fengmei told reporters. Cobalt is the upstream metal with the biggest gain, with London Metal Exchange cobalt rising to $75,205 a tonne at the end of December 2017, up more than 130 per cent from the start of the year. The LME is the world's largest futures and options market for base metals and other metals.

At present, the mainstream technology route of new energy passenger car battery is ternary battery, that is, lithium battery with nickel-cobalt manganate or nickel-cobalt aluminate as the positive electrode material, the precursor material is nickel, cobalt, manganese or nickel, cobalt, aluminum as raw materials, cobalt as a stabilizer in which indispensable.

By the end of November 2017, 3.3 million new energy vehicles had been licensed globally. In 2018, the global new energy vehicle licensing volume is expected to reach 1.7-2 million, and the total licensing volume in history will exceed 5 million. Rapid growth in end-demand has left cobalt, which was oversupplied in the 3C era, in short supply.

CRU, a British analysis group, predicts that stocks of cobalt will fall from 4.65 months in 2015 to 2.58 months in 2018.

Senior personnel of domestic well-known battery enterprises told reporters that in order to pursue higher energy density and get rid of the cost pressure brought by the rising cobalt price, it has become the industry consensus to increase the proportion of nickel in the raw material ratio of ternary battery. South Korea's SNEresearch expects global production of power batteries to reach $31.7 billion by 2020 and $97.9 billion by 2025. Rising cobalt prices, a huge $100 billion market, have helped drive technological change in the $100 billion battery market.

At the same time, the high nickel route to technology, equipment have put forward higher requirements, which will also accelerate the elimination of small and medium-sized battery manufacturers.

With the rapid development of new energy vehicles worldwide, cobalt has once again become a scarce commodity. Global spot cobalt prices have risen to $81,548 a tonne by the start of 2018, up 145 per cent from $33,280 at the start of 2017, according to MetalBulletin. LME cobalt futures also rose to $75,205 a tonne, up 131.52 per cent.

The global spot cobalt market has always lacked a mature pricing system. Although LME launched the cobalt futures contract in 2010, the contract was not actively traded until 2017. Therefore, the transaction of cobalt was always based on the quotation of MB twice a week.

Cobalt prices have risen so much because of supply and demand and artificial speculation.

Cobalt is widely distributed on the earth. It is mainly associated with copper and nickel. The independent cobalt resources are only 17%. But the content of cobalt in tailings is very low and mainly occurs in nature in the form of homogeneity or inclusion. Global reserves of cobalt are small, and China is particularly scarce. According to the calculation of zhiyan information, in 2016, China produced 45,000 tons of refined cobalt (referring to the refined cobalt after smelting), but the metal content of self-produced cobalt ore was only 0.77 million tons, and the external dependence of cobalt resources was more than 80%.

According to the United States geological survey (USGS), the global reserves of cobalt in 2016 were 7 million tons of metal (metal ton refers to the weight of a certain metal contained in various mineral resources), of which the reserves of Congo (gold) amounted to 3.4 million tons of metal, accounting for 48.6% of the total reserves. The next largest is Australia, with about 1m tonnes of cobalt. China has just 80,000 tonnes of cobalt.

Cobalt has less than half the world's reserves of lithium and less than 9 per cent of nickel as the raw material for batteries. According to domestic industry information agency and release center antaike, the global refining capacity of cobalt (referring to the refined cobalt after smelting) was 147,300 tons in 2016, and the output was 109,528 tons. Global cobalt consumption in 2016 was 104,231 tonnes, of which 583,331 tonnes were used for batteries, leaving 5,297 tonnes. With the remaining 5,092 tons of metal in 2015.

Human factors also contributed to the current round of soaring.

Cobalt is a scarce metal and its production capacity has been concentrated. Congo, with the largest cobalt reserves, has 10 mines. Among them, Swiss glencore has mastered 5 mines, including luoyang molybdenum industry, kazakhstan Eurasian natural resources company, united Arab emirates ShalinaResources company, China minmetals group and jinchuan group company holding 1 mine each.

Glencore controls about 67% of the cobalt in mines in Congo. In fact, glencore supplies about 20 per cent of the world's 30 per cent of cobalt, with a dozen other traders supplying 50 per cent.

The concentration of production capacity leads to the absolute number of large companies with the ability to monopolize prices. Glencore, the world's largest supplier of cobalt resources, has controlled capacity, such as shutting down the Katanga copper and cobalt mine in the democratic republic of Congo.

In addition, cobalt production has been reduced by the continuing ferment of mining incidents. In 2016, international organizations alleged that the cobalt industry in the democratic republic of Congo (DRC) was rife with human rights abuses by human rights activists, including child laborers. Glencore, freeport and others have since said they do not deal with artisanal miners. In November 2017, the LME launched an investigation into alleged child Labour at supply sources. Under the pressure of international public opinion, the terminal application enterprises force the mid-stream smelting enterprises to clarify the source of raw materials, and do not use hand mining. This further reduces the production of cobalt.

Li fengmei says, cobalt price relies on be out of stock expect and fry go up. Although the industry is saying there may be a gap in cobalt production, downstream battery companies have not stopped production because of the lack of cobalt, and can buy it if they want

At present, cobalt supply and demand are still in tight balance, but with the increase of new energy vehicle sales, the supply of cobalt in the short term or a gap.

In 2017, the global sales of new energy passenger cars will continue to maintain a high growth rate, reaching 1.15 million, and the proportion of new energy passenger cars is expected to increase to 1%.

If the global sales volume of new energy passenger cars can reach 1.15 million in 2017, the cobalt consumption will reach 11,500 tons according to the calculation of 10 kilograms of cobalt consumption per vehicle. Dongxing securities forecasts that 1.5 million new energy vehicles will be sold worldwide in 2018, using 15,000 tons of cobalt.

Despite the rapid development of new energy vehicles, cobalt production did not increase correspondingly in 2017. Overall output from the world's leading cobalt producers fell about 6 per cent in the first three quarters of 2017. Glencore produced 19,800 tonnes of metal in the first three quarters of 2017, down 5.7 per cent from a year earlier. Luoyang molybdenum mine Tenke mine, Sherritt mine and vale mine saw output fall 8.9 percent, 3.9 percent and 0.9 percent, respectively, in the first three quarters of 2017.

To cope with the increased demand, domestic and foreign enterprises will increase production capacity in 2018, such as the cobalt hydroxide project in the early stage of the 5,000-ton electrolytic cobalt production line project of Congo maite, a subsidiary of hanrui cobalt industry. The President's office of hanrui cobalt industry told reporters that after the 2,000-ton cobalt hydroxide project was put into operation, the subsequent 3,000-ton cobalt hydroxide project of maite plant has been put into operation, but it still takes time to release the capacity. Hurau cobalt's kambove and PE527 mines in the democratic republic of Congo, also due to start production in 2018, will have a capacity of 3,000 tonnes.

Glencore announced the restart of its Katanga copper and cobalt mine.

Antaike cobalt analyst wang zhengxin told reporters, from the upstream capacity and downstream consumption, cobalt in the short term will be in a tight balance.

However, due to the poor infrastructure, lack of energy resources and the general situation of the Congolese government, the expansion of these capacity as scheduled is uncertain. In addition, the situation in Africa will affect the export of rough cobalt from Congo to South Africa.

Mr. Wang said that if the capacity is released as scheduled, cobalt prices will rise steadily in 2018, rather than soar as they did in 2017. It should rise to 600,000-650,000 / t in 2018.

The high-flying advance of cobalt price lets midstream battery company times times pressure. Li fengmei expresses, because cobalt price rises continuously, the company that makes 3 yuan battery begins to move toward high nickel development, reduce cobalt use.

Nickel is one of the most resource-rich metals in the world, and ranks the 5th in the content of the earth after silicon, oxygen, iron and magnesium. Proven reserves are as high as 720 million tons of metal. Many domestic manufacturers of nickel-cobalt-manganese batteries are transitioning from type 111 to type 523, type 622 or even type 811. The above different models represent the different proportions of the three raw materials, such as the nickel-cobalt-manganese ratio of type 111 = 1:1:1, and so on.

Liu yanlong, secretary general of China chemical and physical power industry association, told reporters that 523 to 622 to 811 is the current development direction of power batteries. Now the energy density requirement in subsidy policy is increasing, high nickel is the trend.

However, the production of high nickel batteries is not easy. As nickel is an active metal, with the increase of nickel content in the ternary, the structural stability of the material decreases, leading to a significant reduction in cycle life and safety. Zhu yulong, deputy chief engineer of the engineering department of Shanghai jiexin power battery system co., LTD., told reporters that the higher the nickel ratio, the worse the thermal stability of the whole anode material. In the case of high temperature and external impact, high nickel battery will have potential safety hazards. It is also a problem that high nickel batteries will swell up when they produce gas during charging.

In addition, high-nickel ternary materials cannot be exposed to air during battery assembly, requiring a pure oxygen atmosphere. Senior public figure of domestic well-known battery enterprise tells a reporter, because domestic battery enterprise is to make ni cobalt-manganese 111 model to start, and ni cobalt-manganese 111 model assembly does not need pure oxygen atmosphere, so domestic battery factory has no oxygen burning process almost. In order to produce nickel-cobalt-mn-811 in mass production, the plant and equipment must be redesigned.

Therefore, now the domestic ternary technology maturity is higher is nickel-cobalt-manganese 523, followed by nickel-cobalt-manganese 622. The nickel-cobalt-manganese 811, however, is the only nickel-cobalt-manganese 811 that bick claims to have mass produced.

It is learned that in addition to biko battery, the 811 project of shanshan energy, ningbo jinhe, tianjin bamo, penghui energy and other enterprises has been put into production, and the 811 project of dansheng technology and tianli lithium energy has entered the pilot test. As for the nickel-cobalt-manganese 811 gas production problem, various mainstream battery manufacturers and anode material manufacturers are making technological breakthroughs together.

Although many enterprises claim that the 811 project will be put into production, it is unknown how many new energy vehicles are equipped with 811 batteries.

The above senior personage predicted that the end of 2018 nickel cobalt manganese 811 system may appear finished products. But it will take time for the nickel-cobalt-manganese 811 technology to become widely available.

Lithium and cobalt metals are expected to remain tight until around 2019, with rising prices for raw materials also driving breakthroughs in lithium battery technology.

There is a good chance that 30 per cent of companies will fall through the shuffle. Industry insiders said that in the first 10 months of 2017, a total of 18.1GWh of lithium batteries were installed, and a total of 76 battery manufacturers formed an effective installed supply, compared with 109 in 2016. That means about 30 battery plants could go out of business in 2017.

In the fourth quarter of 2017, a number of domestic enterprises such as byd and yinlong started to invite tenders for power lithium electric equipment. According to the high industry research lithium battery research institute estimates, in the long run, according to the fuel vehicle withdrawal mechanism, lithium battery demand will be dozens of times more than the current market expectations.

It also means that according to the estimate of 30% electrification rate in 2025, the market space of equipment industry will reach 700 billion yuan, with an average annual demand of 100 billion yuan, while the industry output value in 2017 is only over 10 billion yuan.

The page contains the contents of the machine translation.