Tesla and other giants are "robbing" this material in short supply!

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Time : 2022.04.15

The key material of lithium hydroxide, battery giants such as Tesla, CATL, and LG New Energy are all scrambling to grab it.

At present, the capacity expansion of lithium hydroxide producers is accelerating. On September 2, Tianhua Chaojing and the Management Committee of Ganmei Industrial Park in Meishan City planned to sign a project investment contract to build a battery-grade lithium hydroxide project with an annual output of 60,000 tons, with an estimated total investment of RMB 2.5 billion.

The day before, Tianhua Chaojing had just completed an investment of about 2.3 billion yuan, and planned to sign a project investment agreement with the Jiang'an County People's Government of Yibin City to build a battery-grade lithium hydroxide project with an annual output of 50,000 tons. In just two days, Tianhua Chaojing has planned more than 100,000 tons of lithium hydroxide projects, with an amount of nearly 5 billion yuan.

Earlier, in August this year, Hainan Mining announced that it planned to use its subsidiary Hainan Xingzhihai New Materials Co., Ltd. as the project carrier, with an investment of no more than 1.065 billion yuan, to build a new 20,000-ton battery-grade lithium hydroxide project (Phase I). In addition, Shengxin Lithium Energy also stated on the interactive platform that the company has built a lithium hydroxide production capacity of 15,000 tons. At the same time, the company plans to add 30,000 tons of lithium hydroxide production capacity. The first phase of the annual production capacity of 20,000 tons of lithium hydroxide has been Construction will start at the end of 2020.

Since last year, new energy vehicles have started a new round of business cycle, and they are still very popular. Data show that from January to July this year, the sales volume of new energy vehicles in my country was 1.478 million, a year-on-year increase of 2 times, which has exceeded the level of 1.367 million in 2020, a record high. The sales of new energy vehicles accounted for 10.0% of the sales of new cars by manufacturers, an increase of 6.1 percentage points over the same period last year.

The installed capacity of power batteries is also accelerating. According to data released by SNE Research, a South Korean market research institution, the global installed capacity of power batteries reached 137.1GWh from January to July this year. Among them, China's power battery installed capacity reached 63.8GWh, an increase of 183.5% year-on-year, and China's power battery output increased by 210.9% year-on-year to 92.1GWh.

With the rapid growth in the production and sales of new energy vehicles and power batteries, the demand for upstream raw materials has risen sharply. As a key raw material for high-nickel batteries, lithium hydroxide benefits from the continuous increase in the penetration rate of high-nickel ternary batteries. The ternary cathode NCM811, some NCM622 and NCA all use lithium hydroxide as the lithium source to gradually replace lithium carbonate.

At present, many power battery manufacturers including CATL, BYD, Yiwei Lithium, Guoxuan Hi-Tech, Lishen Battery, Funeng Technology, or foreign LG New Energy, Panasonic, SKI, Samsung SDI, etc. In the layout of high-nickel products, including NCM811/NCA, and even 90% NCMA batteries[Neware Battery Tester]. According to Cinda Securities statistics, in 2020, the proportion of high-nickel batteries in ternary batteries has reached as high as 43%.

According to the statistics of research institutes, the proportion of vehicles equipped with ternary high-nickel batteries is relatively high among the blockbuster new cars launched at home and abroad this year, including popular models such as Tesla Model Y/Cybertrunk, Volkswagen ID.4/ID.6, Nissan Ariya, etc. Drive the penetration rate of high nickel in ternary materials to further increase. The industry predicts that the penetration rate of high-nickel ternary materials will reach more than 60%-70% by 2025.

According to the forecast of Cinda Securities, the actual global demand for lithium hydroxide for power batteries will reach 580,000 tons by 2025 (corresponding to 510,000 tons of lithium carbonate equivalent LCE). 1.36 million tons of LCE, of which the total demand for power batteries is 1.1 million tons of LCE, and lithium hydroxide accounts for about 47%.

In order to ensure the supply of raw materials, many companies are actively stocking up on large purchases. In July, LG New Energy signed a lithium hydroxide supply agreement with Australian lithium miner Vulcan Energy Resources for at least five years. According to the agreement, LG New Energy will purchase 5,000 metric tons of battery-grade lithium hydroxide in the first year of the deal and 10,000 tons per year thereafter.

It is worth noting that LG Chem has also signed a supply contract with Ganfeng International before, to purchase 92,600 tons of lithium hydroxide and other products from Ganfeng Lithium from 2019 to 2025. Last year, LG Chem also planned to purchase finely ground lithium hydroxide from Zhiyuan Lithium. In addition, LG Chem has also reached a long-term agreement with SQM, a subsidiary of Tianqi Lithium Industry. SQM will supply battery-grade lithium carbonate and lithium hydroxide to LG Chem from 2021 to 2029, totaling about 55,000 metric tons of lithium carbonate equivalent.

In April of this year, Tianhua Chaojing raised 780 million yuan in directional funds to invest in the construction of a lithium hydroxide project with an annual output of 25,000 tons, of which CATL was allocated 120 million yuan. In fact, as early as two years ago, Ningde Times signed an agreement with Tianyi Lithium Industry, a subsidiary of Tianhua Supercleaning. From 2019 to 2024, Ningde Times will give priority to purchasing lithium hydroxide products from Tianyi Lithium Industry. In addition, last year CATL also signed an agreement with Weihua to purchase 3,000 tons of battery-grade lithium hydroxide from the latter from July 2020 to June 2021.

At the end of last year, Tesla signed a battery-grade lithium hydroxide supply contract with Ya'an Lithium, a subsidiary of Yahua Group, and agreed that from 2021 to 2025, Tesla will purchase a total of US$630-880 million from Ya'an Lithium. battery grade lithium hydroxide products. This means that Tesla has locked in Yahua Lithium's lithium hydroxide production capacity for the next five years.

In addition, South Korean battery[Neware Battery Tester to Test] giant SKI is also busy snapping up lithium hydroxide. In October 2020, SKI and Ronghui Lithium signed a long-term supply agreement for lithium carbonate and lithium hydroxide. According to the agreement, from the fourth quarter of 2020 to the end of 2021, Ronghui Lithium will provide a total of no less than 10,900 tons of lithium salt products to enterprises designated by SKI within its supply chain.

In fact, since the end of last year, the shortage of raw materials for power batteries has continued, and the price of lithium hydroxide has been rising. According to the data of the business society, as of September 3, the average price of domestic industrial-grade lithium hydroxide enterprises was 133,666.67 yuan / ton, an increase of 32.78% compared with August 3, and a year-on-year increase of 51.89 in a three-month cycle. %.

Cinda Securities believes that under the pattern of tight supply and demand, the price of lithium hydroxide is expected to continue to rise and hit a record high, while lithium hydroxide producers can continue to enjoy high premiums. The agency predicts that the price of lithium hydroxide is expected to break through the historical high of 160,000 yuan / ton within this year, and hit 200,000 yuan / ton.

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