Electrolyte price "roller coaster"

Once the price rises too much, it will fall. This is the basic law of the development of the market economy. Lithium battery materials have experienced a big year of price increases in 2021, and they are "fierce" like tigers. Now many materials have fallen to the altar.

For example, the price of electrolyte has "ridden the roller coaster". At the beginning of 2021, the price of electrolyte was only about 45,000 yuan/ton; by the end of 2021, the highest price of electrolyte once jumped to about 120,000 yuan/ton. Since then, electrolyte prices have hovered at high levels, and then continued to decline for several months.

In fact, electrolyte prices have fallen more than 40% from their highs since March of this year. According to market data, the quotation of lithium iron phosphate electrolyte has been as low as about 6.3 yuan/ton in early July . Overall, since 2022, the price of electrolytes has mainly declined at a high level.

"The price of electrolyte mainly depends on the price of upstream electrolytes, additives and solvents, and is closely related to the competition pattern of the industry, and the prices of products in different application fields are quite different." Zhongyuan Securities Research Report said.

From the historical data, the price trend of electrolyte and the price trend of lithium hexafluoro phosphate show a great correlation.

In 2021, the price of lithium hexafluorophosphate will soar from about 107,000 yuan/ton at the beginning of the year to about 565,000 yuan/ton at the end of the year, an increase of over 400%. Correspondingly, the price of electrolyte has also risen. In 2021, the average price of ternary electrolyte will increase by 230% to 113,000 yuan/ton, and the average price of lithium iron phosphate electrolyte will increase by 170% to 110,000 yuan/ton.

In March this year, the average domestic market price of lithium hexafluoro phosphate reached a peak of about 600,000 yuan/ton, an increase of more than 7 times compared with the previous price of less than 70,000 yuan/ton. Since then, the price of lithium hexafluoro phosphate has begun to turn around, and it has shown a trend of falling and falling. And electrolyte prices have also come out of a similar market.

Regarding the future trend of electrolyte prices, Tinci Materials believes that there is a risk of falling prices. However, Tianci Materials said, "The price of electrolyte was high before, but we did not make any profit from this price increase. We have long-term cooperation with customers to lock the price, which is lower than the market price. Therefore, the price fluctuation has a negative impact on the company's Has little effect."

According to the performance forecast for the first half of 2022 released by Tinci Materials, its net profit attributable to shareholders of listed companies in the first half of the year is expected to be 2.8 billion to 3 billion yuan, a year-on-year increase of 257.74%-283.29%; the performance has maintained steady growth. Another electrolyte leader, Xinzhoubang, is expected to have a net profit of 983 million yuan to 1.027 billion yuan in the first half of 2022, a year-on-year increase of 125% to 135%.

The Orient Securities Research Report pointed out that the current price of lithium hexafluoro phosphate has approached the cost line, and the price of lithium hexafluoro phosphate has bottomed out, which means that the price and unit profit of the electrolyte link will soon return. A company with a well-integrated layout in the electrolyte sector will have a strong cost advantage and long-term competitiveness.

From the demand side, the sales growth of new energy vehicles is  HYPERLINK still strong. Industry data show that in the first half of 2022, my country's new energy vehicle industry maintained a high growth rate, with production and sales exceeding 2.6 million units. From the perspective of battery installed capacity, in the first half of 2022, the cumulative installed capacity of power batteries in China reached 110GWh, a year-on-year increase of 109%. It is expected that in the second half of the year, the installed capacity of power batteries will still have a good performance; and this will constitute a driving force for the demand for electrolytes.

In fact, many electrolyte manufacturers are accelerating production expansion. In July of this year alone, Tinci Materials disclosed two major investment projects, and planned to invest 1.522 billion yuan in the "annual production of 200,000 tons of lithium battery electrolyte reconstruction and expansion and 100,000 tons of iron-lithium battery recycling project" and "annual production of 7 tons." .50,000 tons of lithium battery basic materials project”.

Two months before that, Tianci Materials had also made big moves. In June, Tinci Materials plans to invest 1.2 billion yuan in Jiangmen, Guangdong to build a "200,000-ton lithium-ion battery electrolyte project and a 100,000-ton lithium-ion battery recycling project". In May, Tinci Materials announced a 1.332 billion yuan project to build "an annual output of 300,000 tons of lithium battery electrolyte reconstruction and expansion and 100,000 tons of iron-lithium battery dismantling and recycling project."

In addition to Tianci Materials, on July 14, Shi Dashenghua planned to raise no more than 4.5 billion yuan, which will be used for the annual output of 300,000 tons of electrolyte project (Dongying), the annual output of 200,000 tons of electrolyte project (Wuhan), 22 10,000 tons/year lithium battery material production and R&D integration project, 100,000 tons of liquid lithium salt project, 11,000 tons of additive project per year, etc.

In May this year, Jiangsu Guotai announced that its subsidiary Zhangjiagang City Guotai Huarong Chemical New Materials Co., Ltd. plans to set up a wholly-owned subsidiary in Zigong, Sichuan with 200 million yuan, and use this as a carrier to invest in the local construction with an annual output of 300,000 tons of lithium Ion battery electrolyte and recycling 2000 tons of solvent project, the total investment of the project is 1.511 billion yuan.

It is reported that Yongtai Technology, which came from the pharmaceutical field, is also actively adding electrolytes. The company disclosed that the company's annual production of 150,000 tons of electrolyte projects is expected to be put into operation within this year, and the holding subsidiary Yongtaigao will produce 134,000 tons of liquid lithium in the new year. The salt industrialization project is expected to start trial production by the end of this year or early next year.

"Many companies have increased their deployment of electrolytes. On the one hand, driven by the large-scale expansion demand of downstream battery and car companies, the demand for electrolytes will increase significantly in the future; Market share, increase the scale of enterprise supply, and deepen the bond with downstream manufacturers to better achieve profitability, and thus have a strong right to speak in terms of pricing.” Industry analysts said.

According to the forecast of Minsheng Securities, the domestic electrolyte production capacity will reach 1.91 million tons in 2022, and it will increase to 4.07 million tons in 2025, with a compound annual growth rate of 28.75%; overseas enterprises are relatively conservative in expanding production capacity, and it is expected that overseas electrolyte production capacity will increase in 2022. It is 190,000 tons and will increase to 260,000 tons in 2025, with a compound annual growth rate of 10.58%. In the future, the growth of global electrolyte production capacity will mainly come from Chinese domestic manufacturers.