The wave of electrolyte expansion is coming, who can stand out?

As the electrolyte of the "blood" of lithium batteries, its demand has grown rapidly
with the popularity of power batteries.
In this context, since the beginning of this year, electrolyte manufacturers have set off a wave of expansion, and leading companies continue to increase the production capacity of electrolytes and their raw materials, while companies in other fields have also cross-border entry
.
So, who will stand out in the expansion tide in the end?

The pace of expansion has accelerated

Since the beginning of this year, the pace of expansion of electrolyte leading enterprises Xinzhubang, Tianci New Material and Shenghua New Material has accelerated, and there are planning projects
of different scales.

On November 9, Shenghua New Materials announced that it plans to establish Shenghua New Energy Technology (Leshan) Co.
, Ltd.
as a joint venture with Yulin Chemical Yugao Chemical Co.
, Ltd.
, and invest 6.
5 billion yuan to build a 600,000-ton/year lithium battery electrolyte project
.
In addition, Shenghua New Materials has planned an electrolyte production capacity of 500,000 tons/year, its 300,000 tons/year project in the Middle East is expected to be completed in December 2022, and the Wuhan 200,000 tons/year electrolyte project is expected to be completed
in October 2023.

The Tianci material has accelerated its layout
in the first half of the year.
In May ~ July alone, Tianci Materials issued three electrolyte project announcements, namely, it is planned to invest 1.
332 billion yuan to build 300,000 tons/year lithium battery electrolyte transformation and expansion projects through the self-financing of Sun Company Fuding Kaixin Battery Materials Co.
, Ltd.
; It is planned to invest 1.
2 billion yuan in Jiangmen, Guangdong Province to build a 200,000-ton/year lithium-ion battery electrolyte project; Jiangsu Tianci High-tech Materials Co.
, Ltd.
, a wholly-owned subsidiary, plans to invest 1.
2 billion yuan to build a 200,000-ton/year lithium battery electrolyte transformation and expansion project
.

Another leading enterprise, Xinzhoubang, also announced on May 21 that its holding subsidiary Jingmen Xinzhoubang invested 350 million yuan to build a 20,000 tons/year lithium-ion battery electrolyte project
.

While leading enterprises actively layout electrolyte projects, Yongtai Technology, Fainright and other related enterprises have also joined in
.
Since the beginning of this year, Yongtai Technology has issued announcements respectively that it plans to invest 400 million yuan to build a 150,000-ton / year electrolyte project; Its subsidiary, Yongtai High-tech, plans to invest 950 million yuan to build a 200,000-ton/year electrolyte and related materials project
.

Not only that, foreign companies have also accelerated the pace of
deploying electrolyte projects in China.
On September 1, the Yienke Jiangsu Zhangjiagang electrolyte project with a total investment of 960 million yuan was officially started, and after completion, it will form an electrolyte production capacity
of 140,000 tons/year.
Yienke also signed a contract with Shandong Tianrun New Energy on May 20 to jointly build a new 100,000 tons/year electrolyte project
.

At the same time, the layout of electrolyte core raw material projects is also accelerating
.
According to the reporter's rough statistics, in the first three quarters of this year, 48 electrolyte and raw material investment expansion projects have been announced in China, of which 37 projects have announced specific investment amounts, with a total investment of nearly 100 billion yuan, an increase of more than
1 times over 48.
3 billion yuan last year.

The demand outlook is promising

"With the growth of demand for new energy vehicle power batteries, the rapid expansion of emerging consumer fields and the outbreak of the energy storage industry during the "14th Five-Year Plan" period, lithium battery demand will drive electrolyte shipments to maintain rapid growth
.
Industry insiders think
.

According to a survey by the Lithium Battery Research Institute of Advanced Industry and Research, China's power battery shipments in 2021 will be 220GWh, an increase of 175%
over the previous year.
It is estimated that the domestic production of new energy vehicles is expected to reach 6 million units in 2022, which will drive power battery shipments to exceed 450GWh; By 2025, global power battery shipments will reach 1550GWh, and are expected to reach 3000GWh
in 2030.

According to the research institute EVTank, before 2030, the compound growth rate of global lithium-ion battery shipments will reach 25.
6%.

The development of the lithium battery industry has entered a period of rapid expansion, and the electrolyte industry will also usher in rapid development
.
According to EVTank data, global lithium-ion battery electrolyte shipments in 2021 were 612,000 tons, an increase of 83.
2% over the previous year, of which Chinese enterprises shipped 507,000 tons of lithium-ion battery electrolytes, an increase of 88.
5%, accounting for 82.
8%
of global electrolyte shipments.
At the same time, EVTank expects that the global demand for lithium-ion battery electrolytes will reach 2.
163 million tons
in 2025.
The Institute of Advanced Industry predicts that driven by the global new energy vehicle terminal production and sales and energy storage market, China's electrolyte shipments will reach 1.
8 million tons
in 2025.

The Prospective Industry Research Institute pointed out that with the continuous expansion of China's leading electrolyte manufacturers, the market share of electrolytes of Chinese enterprises will further increase
in the future.

The integrated layout shows advantages

The wave of electrolyte expansion is coming, how can enterprises stand out from the competition?" In the industrial integration layout, enterprises with technological advantages and production capacity advantages will broaden their 'moat'
.
This is the answer
given by many industry insiders.

Since the beginning of this year, the market of lithium hexafluorophosphate, the key raw material of electrolyte, has experienced a "roller coaster" rise and fall, making electrolyte companies aware of the importance of
supply chain security.

It is understood that in March this year, the price of lithium hexafluorophosphate soared from less than 70,000 yuan (ton price, the same below) at the end of July 2020 to 600,000 yuan, and the price fell below 300,000 yuan in mid-May, and then the average price was about 250,000 yuan, and then stabilized
.
As of December 6, the domestic price of lithium hexafluorophosphate was 259,000 yuan
.

Yu Qingjiao, secretary general of the Zhongguancun New Battery Technology Innovation Alliance, once reminded the electrolyte industry to be vigilant about its raw material supply problems
.

In view of the possible shortage of raw materials, a number of electrolyte companies began to gradually layout the upstream field
.
Chen Chuanhong, chief analyst of the new energy vehicle industry of Guojin Securities, analyzed that from the perspective of revenue and profit, regardless of whether the electrolyte company provides its own raw material lithium hexafluorophosphate, it will benefit from the upward cycle of the electrolyte, and the gross profit of the product will also rise
when the cycle rises.
However, the profit elasticity of self-supplied lithium hexafluorophosphate enterprises will be greater
.

"The electrolyte industry is showing a trend
of vertical integration.
In the future, whoever has a leading craft and a low cost will live more moisturized
in the shuffle.
Building a cost 'moat' through process leadership is also a good way
to cope with market competition.
Chen Chuanhong said that leading enterprises rely on cost advantages while continuing to develop and provide personalized customized products, and are more competitive
.
As a result, the share of the faucet electrolyte will also accelerate concentration
.

Some insiders believe that at present, the head enterprises are relatively sticky with battery factory customers, and the short-term product increment will still be concentrated in the head enterprises
.
With the rapid growth of downstream demand, enterprises with technological advantages and capacity advantages will also broaden their "moats", and the industry structure will be further optimized
.