Chuanfa Lomon invested 12 billion yuan to build a new lithium battery material project

Another phosphorus chemical giant, Chuanfa Lomon, announced an increase in investment in the lithium iron phosphate project, a new energy material for lithium batteries

Less than a week ago, Yuntianhua announced to join hands with partners to invest in the entire lithium battery industry chain, including iron phosphate and lithium iron phosphate products

Chuanfa Lomon invested 12 billion yuan in lithium iron phosphate project

Sichuan Development Lomon Co.

According to the announcement, the project will have an annual output of 200,000 tons of lithium iron phosphate, 200,000 tons of iron phosphate and supporting products

The project construction period is planned to be from March 2022 to December 2026

According to the announcement, as the demand for power batteries and energy storage batteries continues to grow rapidly, there will be more room for future growth in related segments of the industry chain such as lithium iron phosphate, which will provide a good market guarantee for the demand for project products

At present, Chuanfa Lomon is in the process of issuing shares to acquire 100% equity of Sichuan Development Tianrui Mining Co.

　　Industrial grade monoammonium phosphate has become one of the important raw materials of iron phosphate, the precursor of lithium iron phosphate, the cathode material of lithium iron phosphate battery

　　Chuanfa Lomon stated that, as a leading enterprise in the domestic industrial-grade monoammonium phosphate, feed-grade calcium hydrogen phosphate and some fine phosphate segments, combined with its own strategic development plan, industrial advantages and resource endowments, it will vigorously develop new lithium iron phosphate.

　　On November 19, 2021, Chuanfa Lomon signed an investment framework agreement with the Management Committee of Deyang-Aba Eco-Economic Industrial Park, planning to invest in the construction of a new energy material project with an annual output of 200,000 tons, which marked the official entry of Chuanfa Lomon.

　　This is not the first time that Chuanfa Lomon has deployed a lithium iron phosphate project

　　On December 9, 2021, Chuanfa Lomon announced again that it plans to build a 200,000-ton/year new material project in Panzhihua Vanadium and Titanium Development Zone, with an annual output of 200,000 tons of lithium iron phosphate, 200,000 tons of iron phosphate and 30 tons of sulfuric acid.

　　Phosphorus chemical companies get together for cross-border lithium battery materials

　　Since 2020, the cost-effective advantage of lithium iron phosphate has become prominent, the installed capacity of power batteries has gradually surpassed that of ternary materials, the superimposed energy storage battery market has flourished, and the popularity of lithium iron phosphate has continued to increase

　　Due to the advantages of raw materials such as phosphoric acid and cost advantages, phosphorus chemical companies are very motivated to transform the lithium iron phosphate industry chain, and have formed an investment boom in the industry

　　On February 16, Yuntianhua, Enjie Co.

　　In the construction of batteries and upstream and downstream materials, projects such as batteries, separators, iron phosphate, lithium iron phosphate, and copper foil are planned to be invested in three phases.

　　As early as the end of 2020, Yuntianhua, based on fluorine and silicon resources, a by-product of phosphate fertilizer, joined hands with Polyfluoride to build a 5,000-ton/year lithium hexafluorophosphate and other fluorine-silicon projects, which are planned to be completed in 2022
.
In October 2021, Yuntianhua announced the construction of 500,000 tons/year iron phosphate battery new material precursors and supporting projects.
The overall estimated investment of the project is 7.
286 billion yuan, of which the first batch of 100,000 tons/year iron phosphate projects and supporting facilities , is expected to be completed in June 2022; the remaining 2 × 200,000 tons is expected to be completed in December 2023
.

　　In December 2021, Guizhou Phosphate Group and the domestic new energy leading enterprise Ningde Times battery industry cooperation project started simultaneously in Kaiyang, Xifeng and Fuquan bases
.

　　Hubei Yihua also announced in October 2021 that it has reached a cooperation intention with Ningbo Bangpu, a subsidiary of Ningde Times, for an integrated battery material supporting chemical raw material project.
, sulfuric acid and other chemical raw materials, and supporting phosphogypsum turnover field and comprehensive utilization project of phosphogypsum
.

　　In November 2021, Xingfa Group signed a cooperation framework agreement with Huayou Cobalt Industry, and planned to build an integrated industry of phosphate mining, phosphorus chemical industry, wet-process phosphoric acid, iron phosphate and lithium iron phosphate materials in Yichang, Hubei.
500,000 tons/year of iron phosphate, 500,000 tons/year of lithium iron phosphate and related supporting projects
.
In December, Xingfa announced again that the two parties have established a joint venture company in Yichang, and plan to start the construction of a 300,000-ton/year iron phosphate project, of which the planned production capacity of the first phase is 100,000 tons/year
.

　　In addition, Smart also reached an agreement with Rongjie Group in September 2021 to set up a company engaged in the production of lithium iron phosphate.

.

　　Strong demand for new energy

　　From the perspective of the industry, the strong rise of the phosphorus chemical industry chain is inseparable from the strong demand for lithium battery raw materials from the vigorous development of the global new energy vehicle industry
.

　　Industry data show that in 2021, China's new energy vehicle production will be 3.
545 million units and sales will be 3.
521 million units, an increase of 1.
6 times over the previous year.
percent
.

　　According to data analyzed by Platts, global sales of plug-in light-duty electric vehicles will be 3.
1 million in 2020, an estimated 6 million in 2021, 6.
5 million in 2022, and 10.
5 million in 2025
.

　　It is understood that every ton of lithium iron phosphate produced requires 0.
5-0.
65 tons of phosphate rock (reduced pure) and 0.
8 tons of monoammonium phosphate
.
In the actual production process, a 1GWh lithium iron phosphate battery requires 2,500 tons of lithium iron phosphate as a positive electrode material, and the center estimates that it needs about 1,440 tons of phosphate rock (reduced pure, that is, 100% phosphorus pentoxide)
.

　　The rapid growth of demand for lithium iron phosphate will be transmitted upstream along the industrial chain, which will lead to a surge in demand for phosphorus resources
.

　　According to the announcement of Chuanfa Lomon, from 2016 to 2021, the apparent consumption of lithium iron phosphate in China will increase from 81,600 tons to 420,000 tons, with a compound annual growth rate of about 38.
76%
.

　　Some institutions predict that the global shipment of lithium iron phosphate batteries will reach 927.
5GWh by 2025, a compound growth of about 78% compared with 2020, and the demand for lithium iron phosphate will be close to 2 million tons
.

　　In short, with the development of emerging industries such as new energy vehicles and energy storage, the importance of phosphorus resources will gradually become prominent, which will generate strong demand for phosphate rock in the future, or it will be transmitted to the entire phosphorus chemical industry chain
.

　　Behind the fiery investment wave, there are hidden investment risks.
When the production capacity is released in a concentrated manner, it will inevitably bring about a round of industry reshuffle
.

　　The first is the risk of excess supply due to more new production capacity
.
Chuanfa Lomon admitted in the announcement that at present, major domestic phosphorus chemical companies and titanium dioxide companies have introduced iron phosphate and lithium iron phosphate construction plans.
Although the industry predicts strong downstream demand, there are still more new production capacity leading to excess product supply.
risk
.

　　The second is the risk of product technology iteration
.
If the technology of new energy products is iterated too fast, there may be a risk of insufficient mastery of new product technology, resulting in the risk of related product technology falling behind industry development and market demand
.
The biggest competitor of lithium iron phosphate battery is the ternary lithium battery with energy density advantage
.

　　Again, there is the risk of large price fluctuations of some raw materials and insufficient supply
.
The main raw materials of lithium iron phosphate, such as purified phosphoric acid, industrial grade monoammonium phosphate, ferrous sulfate, lithium carbonate and other products, have experienced large price increases in recent years.
In particular, lithium carbonate has risen sharply recently and is in short supply.
The industry expects that its prices may continue to remain high
.
On the one hand, the rising price of raw materials reduces the profit margin of the products to be built; on the other hand, whether the supply of raw materials is sufficient affects the downstream operating rate, and there is a risk of large price fluctuations and insufficient supply of raw materials in some supply chains
.

　　In addition, we must also be alert to the risk of approval of production capacity projects, environmental protection and safety production risks
.