Current status of power batteries and raw materials

Current status of power batteries and raw materials

The mining war that grabbed upstream resources of power batteries caused by the rise of raw materials such as lithium, cobalt and nickel has entered a white-hot stage in the world. In the Chinese market where new energy vehicles have risen, the war of robbing related resources has carried out to the fullest.

The Pilbara Mining Company, headquartered in Perth, Australia, has recently received orders from all over the world, including Yanfeng Lithium and Great Wall Motors from China.

Almost at the same time, Jiangmen Electric from Jiangxi Province of China also signed an investment agreement with the Australian lithium mine company Tawana Resources.

However, Australia's largest investment bank, Macquarie Group Ltd., has warned that too many Australian mining companies are building new lithium mines and flooding into the lithium market, which may create an oversupply situation in the short term. And electric cars will only develop in 2021.

In September, global lithium mine prices finally stabilized. However, the scarcity of supply due to demand is extremely rare in the history of mining.

Lithium ore is an important raw material for the production of lithium carbonate. The global lithium ore resources are limited, and lithium technology is not enough. The supply of lithium concentrate that can converted into battery-grade lithium carbonate is very limited. In the context of strong demand in the power market, lithium carbonate prices fluctuate frequently and are bullish all the way.

The world caught in the competition for lithium mine assets, and the Chinese market in the rise of new energy vehicles is even more vivid. The "mine war" of the power battery industry, which was triggered by the rise of raw materials such as lithium, cobalt and nickel, has entered a white-hot stage. In addition to the existing defenders, the capital of various roads has been particularly eye-catching, and the intensity is unprecedented.

Lithium carbonate supply is insufficient to lead the fuse

insufficient supply of lithium carbonate and price fluctuations are becoming the trigger for driving lithium batteries in the upstream of battery companies.

As a raw material for the positive energy materials of new energy-vehicle power batteries, lithium carbonate has driven by the outbreak of new energy vehicle production and sales, and the demand is constantly rising. The tight supply and demand have caused the price to rise.

The latest data shows that the demand for traditional industrial lithium carbonate in 2016 was 121,300 tons, and it was stable at a growth rate of 2%. It predicted that the global demand for lithium carbonate in 2017-2020 would be 21.91, 25.09 and 293,300 tons, respectively, with a year-on-year growth rate of more than 10%.

A more serious fact is that this year, the power battery market has driven by the explosion of new energy vehicles, speeding up the consumption of upstream raw materials and demand. However, the new production capacity of lithium carbonate has a long release period, and there is frequent supply lag, resulting in imbalance between supply and demand and frequent price fluctuations.

On the one hand, the development of hybrid and pure electric vehicles has driven the explosive demand for battery-grade lithium carbonate and battery-grade lithium hydroxide in the world. On the other hand, the demand for lithium batteries in digital 3C products is still strong, and traditional fields such as glass ceramics have remained stable for a long time. Therefore, the demand for lithium will maintain a strong growth trend.

According to industry-data service provider Roskill, global demand for lithium will reach 1 million tons by 2026, and the compound annual growth rate will reach 18%. The main driving force comes from the battery industry, especially the new energy-vehicle power battery industry.

At the same time, data from the China Geological Survey show that by 2020, China will achieve an annual output of 2 million new energy vehicles, when the amount of lithium products will reach 8 to 100,000 tons of lithium carbonate equivalent, exceeding the national lithium products in 2015. Consumption. Under the premise that demand in other fields remains unchanged, it -expected that lithium demand will reach 150,000 tons of lithium carbonate equivalent in 2020.

Analysts believe that the global lithium resource reserves are huge, but the supply shortage of battery-grade lithium carbonate is mainly based on two reasons: First, the effective supply of lithium mine is limited and slow. The long-term monopoly of lithium mines is in the hands of several leading enterprises such as SQM and FMC. In addition, the exploitation of lithium resources is difficult, the development of lithium technology is slow, and the supply is insufficient. At the same time, the consumption of lithium mine is much faster than the supply, so that the exploitation of lithium resources often lags behind Market demand.

Second, under the premise of sufficient lithium mines, there is a time difference in the release of new capacity of battery-grade lithium carbonate. Especially due to various internal and external factors such as seasons, lithium extraction from brine, infrastructure, etc., the new capacity release cycle extended. In this regard, the analysis from the Institute of Advanced Industrial Research Lithium Electric Research (GGII) pointed out that the capacity release cycle is at least one and a half years.

Therefore, the disconnection between supply and demand fundamentals has become the root cause of the frequent fluctuations in the price of lithium carbonate and all the way up.

"In 2017 and 2018, the supply and demand of lithium carbonate is in a tight balance. It is expected that by 2019, the supply and demand pattern of lithium carbonate will be more relaxed." Bank of China Securities analyst Wang Qiu Ming analyzed the "Energy" reporter.

Battery companies forced "Liangshan".

Under premise of the lagging supply of lithium mine-lithium carbonate market, in order to fully guarantee and stabilize its own supply chain, and not subject to raw material constraints, to seize the opportunities in the future market. battery companies usually face two outlets: First, cooperation with lithium carbonate enterprises Alliance, strengthen the deep binding; Second, cross the lithium carbonate enterprises, directly control the lithium mine, find someone to OEM, to meet their own needs.

From the current situation, most battery companies choose the first one. In fact, this choice is a win-win situation for both parties to the transaction and can establish a stable and harmonious market-trading environment.

However, the domestic new energy auto industry has been springing up like a mushroom. The entire industrial chain caught off guard, and power batteries and even vehicle manufacturers have been eager to start large-scale expansion.

According to the geological survey data, the proven lithium resource reserves in more than 100 salt lakes and lakes in Qinghai are 17.24 million tons, accounting for 83% of the national reserves and one-third of the world's lithium lithium resources. A battle for resources, technology and capital has quietly begun here.

As early as 2011, Peking University's holding subsidiary Taifeng Lithium and New Energy Technology began construction of 5GWh power and energy storage batteries and 50,000 tons of energy storage battery cathode materials projects in Qinghai. The total investment of the project is 7.5 billion yuan. At present, the joint venture company lithium-iron phosphate and ternary cathode materials have built 15,000 tons of production capacity, and the first phase of phase III (10,000 tons of cathode material) expected to be completed and into production by the end of 2017.

In 2015, Peking University's holding subsidiary Taifeng Pioneer Investment and the National Development Fund jointly established Qinghai Beijie. On November 15, 2016, Qinghai Beijie invested 5.4 billion yuan to produce 2 billion square meters of power and energy storage lithium-ion battery diaphragm project in Xining. The first phase plans to invest 1.4 billion yuan, with an annual production capacity of 500 million square meters. The first (50 million square meters) lithium-battery separator production line expected to put into operation in October 2017.

Recently, the Ningde era, which is in the limelight, also set up a subsidiary in Qinghai Times in 2012. It plans to invest 7.5 billion yuan to build a 5GWh power lithium battery and energy-storage lithium-battery project base.

The expansion of production is urgent and the supply is slow. Especially under the pressure of cost reduction, the price fluctuation of lithium carbonate is too large, which is undoubtedly worse. Some battery companies have been unable to hold back and start taking control of the lithium mine. BYD is a typical example.

On October 29, 2016, Qinghai BYD's annual production of 10GWh power lithium-battery project and annual production of 20,000 tons of power-battery material production and recycling project started in Xining. BYD CTO Liu Weiping revealed that the first phase of the Qinghai 10GWh power-lithium battery project expected to put into operation in the second half of this year. The project can produce lithium iron phosphate and ternary batteries, and the actual production and product ratio will produced according to market demand.

In fact, as early as 2003, listed companies affiliated with battery companies were involved in lithium mines. In addition to the industry leader BYD, Xingneng Group, CITIC Guoan, Qifeng Lithium Industry and Jianrui Wooleng have also controlled or started to engage in lithium resources.

Careful analysis is not difficult to see, the main players involved are listed companies, mainly battery companies and materials companies, and five listed companies have power battery subsidiaries or businesses. Such as CITIC Guoan - Meng Gu Li, BYD - BYD, Xingneng Group - Jianxing Lithium, Yan Feng Lithium - Li Feng Lithium, Jianrui Woneng - Waterma. In addition, the biggest common denominator dedicated to the layout of the entire industry chain.

Specifically, BYD and Jerry Wynner both based on the power battery business; CITIC Guoan and Xingneng Group have started the two-wheel integration strategy of lithium battery materials and lithium battery business since the establishment of the company, which has opened up lithium battery production. The goal of the industrial chain is very clear, and lithium mines have become necessary.

The analysis pointed out that it is uncommon for battery companies to control lithium mines, just as car companies have a strong desire for core components. It expected that within 1-2 years, lithium resources would face a tight supply. Battery companies are "first to be strong" and can take advantage of the first-mover advantage in future market competition. However, cross-border investment in upstream lithium mines battery companies need to have strong financial strength, strong business development needs, and sound industrial chain management and other software and hardware conditions. Otherwise, being too radical is just not worth the candle.

In fact, the listed companies involved in the lithium battery and have the power battery business are not only listed above, but such as the Southeast, Shengyang shares, etc., but also after these listed companies entered the lithium battery, the power business is not outstanding.

"The layout of power batteries in car enterprises is not new, from the Great Wall and other companies to seize the lithium resources. to SAIC, Dongfeng, Changan and other capital injections Ningde era joint venture to build factories, then to BMW, Huatai, Che and home companies, self-built battery factories, Car companies attempt to control the entire industrial chain, as well as through the battery to carry out energy storage and other directions." Tianqi Lithium industry, an unnamed practitioners to the "Energy" reporter analysis, "and the power battery companies layout front-end mining, Perhaps entering the new energy car is their ultimate dream."

Overseas overweight wants to break the monopoly

At present, the global lithium resource reserves are concentrated, and the pattern of supply of oligopoly of lithium resources has existed for a long time and it is difficult to break.

In 2016, the global proven lithium resource reserves (metal lithium equivalent) reached 48 million tons, of which the total reserves of Bolivia, Chile and Argentina in South America reached 31.5 million tons, accounting for up to 65%, and the US lithium resource reserves were 5.44 million tons, accounting for about 11%, China ranked fifth, accounting for 11%.

"Lithium in the salt lake is the most widely used in the world. The production capacity is relatively high, and the international trio oligopoly situation is obvious." Li Min (a pseudonym) of the BAK Battery Research Institute introduced to the "Energy" reporter, "Whether the ore is lithium It is a mainstream method in China, including limestone roasting, sulphate roasting, and sulphuric acid roasting, which are compounds that extract lithium from a lithium rock through a chemical recovery process."

It understood that the salt lake has the lowest cost of lithium extraction, about 50,000 yuan per ton. However, due to natural factors (rainfall, floods, etc.) and human factors (technical renovation and maintenance), production cannot increased significantly in the short term. It is widely expected that the lithium extraction capacity of Salt Lake will greatly improved by 2019-2020.

The extraction of lithium from ore mainly divided into two types: lithium-phosphorus lithium and lithium mica. The spodumene from abroad and the concentrate grade is about 5%-6%. The price of spodumene concentrate is currently around US$1,000 per ton. According to the calculation of 1 ton of lithium carbonate in 8 tons of spodumene concentrate, the raw material cost is 56,000-60,000 yuan, plus more than 20,000 manufacturing costs. The overall cost is about 80,000 yuan.

It is worth noting that the direction of the power-battery technology route is changing, and the resulting ternary battery market will usher in an explosive growth trend.

Major manufacturers including BYD, Ningde era, Guoxuan Hi-Tech, Waterma and other lithium-iron phosphate batteries have begun to re-route ternary. The dependence of the industrial chain on mineral resources such as nickel, cobalt and lithium continue to increase.

Bloomberg New Energy Finance's latest global lithium mine report believes that with the launch of new lithium mines, until 2020, the tension in lithium prices can be alleviated. It is also possible that the capacity of new lithium mines will be insufficient in the future, and lithium prices will be further stimulated higher under demand.

In the international market, the world's major lithium resources mining is in the hands of the four companies in the United States, Albemarle, FMC, Chile SQM and Australia Thaleson. According to some data, these four companies account for more than 90% of the global market, of which the top three are brine extraction technology, accounting for more than 60% of the market.

Although China's lithium resources are abundant, it limited by the development technology and so on. The proportion of brine and ore directly used as raw materials in the middle and lower reaches is very small. China's lithium resources have been limited in mining for a long time, accounting for about 5% of global production.

There is no doubt overseas "mine wars" are inevitable.

On June 20, 2017, Tianqi Lithium announced that the company plans to expand the battery-grade lithium hydroxide capacity again and start the second phase of the annual production of 24,000 tons of battery-grade lithium hydroxide-monohydrate project. Its unique resource endowment advantage and pricing power advantage make it the absolute leader of the upstream sector of the domestic new energy-vehicle industry chain.

Another big giant, Lifeng Lithium, currently owns four major mines, namely Heyuan Semenite Mine, Argentina Mariana Brine Mine, Ireland Blackstairs and Australia's MontMarion. In May 2017, Yanfeng Lithium agreed to invest in Pilbara Minerals' lithium-mine development project.

"The revenue and gross profit margin of Tianqi Lithium Industry and Yanfeng Lithium Industry are much higher than other lithium carbonate enterprises. Because these two companies hold rich upstream lithium resources, they have absolute in the upstream lithium minefield. The right to speak is conducive to the control of costs and prices." Wang Qiu-ming analyzed, "It should also be noted that the dependence of the industrial chain on mineral resources such as nickel, cobalt and lithium continues to increase. The performance of upstream enterprises has grown rapidly and performance has increased. The certainty is also strong. However, due to the market's full expectation of its performance growth, the current valuation is already high due to short-term speculation risk."

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