Power battery industry chain “burst”: raw material prices “skyrocketing” still in short supply

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Source: Daily Economic News
A few days ago, a recruitment information about Ningde times (300750. SZ) on a recruitment website caused heated discussion.
The recruitment information is released by the official account of Ningde times workers recruitment center, and the main recruitment positions involve production and manufacturing. According to the job description, due to the sharp rise of year-end orders, in order to encourage everyone to continue to work overtime during the Spring Festival to ensure the company’s shipment, a major bonus incentive was set up. According to the incentive plan, not only will there be three times the legal salary for three days of the Spring Festival, but also an extra reward of 200 yuan per day in February, that is, the net income of front-line workers will reach 13100 yuan if they do not go home for the new year in that month.
Image source: visual China
It is understood that due to excessive market demand, orders of a number of power battery manufacturers “soared”. According to the data of China Automobile Industry Association, in December 2020, the sales volume of power batteries in China totaled 12.2gwh, with a year-on-year growth of 56.9%. Among them, the sales volume of ternary battery was 6.5gwh, up 9.3% year on year, accounting for 53.2% of the total sales volume of power battery; the sales volume of lithium iron phosphate battery was 5.6gwh, up 244.2% year on year, accounting for 45.8% of the total sales volume of power battery.
Driven by strong market demand, the prices of power battery raw materials including lithium salt, electrolytic cobalt and copper foil also continued to rise. A number of upstream cathode material enterprises are stepping up production scheduling and expanding production capacity. According to SMM data, in 2020, 10 upstream cathode material enterprises will expand production one after another, and it is expected to expand high nickel ternary cathode materials, lithium-ion battery cathode materials, etc., totaling 585000 tons.
Power battery raw material price “soaring”
With the recovery and strength of the domestic new energy vehicle market, the power battery industry chain closely related to new energy vehicles is warming up rapidly, and the installed capacity is climbing. According to the data of China automotive power battery industry innovation alliance, in 2020, China’s power battery loading volume accumulated 63.6gwh, with a year-on-year growth of 2.3%.
Thanks to the strong market demand, the prices of power battery raw materials such as lithium salt, electrolytic cobalt and copper foil also continued to rise. According to SMM data, as of January 18, the average price of electrolytic cobalt was 299500 yuan / ton, up 26.1% from the lowest since the beginning of 2020; the average price of battery grade lithium carbonate was 63000 yuan / ton, up 58.49% from the lowest since the beginning of 2020; the average price of lithium hydroxide was 48200 yuan / ton, up 14.88% from the lowest since the beginning of 2020.
It is worth mentioning that even if the price “skyrocketed”, some raw material enterprises are still in short supply. Ganfeng lithium (002460. SZ), the leading enterprise in the industry, said in the interaction with investors that the company’s design capacity of lithium hydroxide and lithium carbonate reached 81000 tons / year and 40500 tons / year respectively. But in terms of supply, the company’s lithium products are in short supply, especially in January and February due to the impact of the Spring Festival holiday. The company expects that lithium salt products will be in a tight supply this year.
Photo source: Daily Economic News
“Driven by new energy vehicles and 3C consumer electronics, the growth rate of lithium demand in the future will be maintained at more than 20%. If the demand for replenishment in the industrial chain is taken into account, the supply will fall short of demand in 2021.” Zhongtai Securities said.
The higher demand for lithium batteries has further driven up the prices of related manufacturing accessories. Taking copper foil, the key auxiliary material of lithium battery, as an example, due to the fact that the relevant products are in the iterative period, combined with the continuous fluctuation of international copper price and the rebound of new energy vehicle market demand, the supply and demand of copper foil market is increasingly unbalanced, and the price rises with the trend. According to the data of Baichuan Yingfu, in December 2020, the price of 6-micron copper foil has risen to 76 yuan / kg, up 7.8% compared with the lowest value in March of the same year, while the price of 8-micron copper foil is 94 yuan / kg, up 5% compared with the lowest value in the same year.
Zhongyuan Securities said in the relevant research report that the global new energy automobile industry continues to boom, carbon emission reduction consensus is the long-term driving force for the development of the industry, combined with the price of upstream raw materials, China’s power battery industry chain has significant advantages, and the overall performance growth of lithium battery plate is expected to increase in 2021.
Enterprises at the head of industrial chain step up production expansion
In fact, Ningde era’s “urgent hiring” of production and manufacturing personnel may be related to its rapid expansion of production capacity in recent years, which is the epitome of the continuous development of the global power battery industry chain. According to SNE research of South Korea, the global lithium battery shipment may reach 1160gwh in 2025, forming a leap from “GWH” to “TWH”.
At the end of 2020, Ningde Times announced that it plans to invest and expand the power battery Yibin manufacturing base project in the Lingang Economic and Technological Development Zone of Yibin City, Sichuan Province; it plans to invest and build the power battery production base in Fuding City, Ningde City, Fujian Province, with a total investment of no more than 17 billion yuan. In addition, Ningde times plans to invest in the construction of Jiangsu times power and energy storage lithium battery R & D and production project (phase IV) in Zhongguancun High tech Zone, Liyang City, Jiangsu Province, with a total investment of no more than 12 billion yuan.
In addition to Ningde era, other domestic power battery manufacturing giants are also speeding up their capacity layout. Among them, AVIC lithium Xiamen A6 project has a total investment of 10 billion yuan, with a planned total capacity of 20gwh, and the global planned capacity has exceeded 200gwh; honeycomb Energy announced an investment of 15.5 billion yuan to build a 24gwh battery factory in Germany; the first production line of GZB factory of BYD Verdi battery’s second business division will also be put into operation in April, with four production lines planned to be built in phase I, with a total capacity of 10gwh. At the same time, BYD signed a contract with Bengbu Municipal Government of Anhui Province to invest 6 billion yuan to increase the production capacity of 20gwh blade batteries in Bengbu City.
Photo source: photographing.com

In terms of bank securities, it is estimated that the year-on-year growth rate of global new energy vehicle sales and power battery shipment in 2021 may reach 40.4% and 45.1% respectively. “Under the background of China’s carbon peak in 2030, carbon neutralization in 2060 and the wave of global energy transformation, the new energy industry, as a high-end manufacturing industry, is in line with the national development strategy of domestic and international dual cycle mutual promotion. Electric vehicles have ushered in a golden development period, so we should seize the opportunity of power battery.” Galaxy Securities said.
In addition, in the upstream of the industrial chain, many leading enterprises including Dow Technology (300409. SZ), Fulin Seiko (300432. SZ) and dangsheng Technology (300073. SZ) have also expanded their production capacity. According to SMM data, in 2020, 10 upstream cathode material enterprises will expand production one after another, and it is expected to expand high nickel ternary cathode materials, lithium-ion battery cathode materials, etc., totaling 585000 tons.
“The power lithium battery industry has experienced overcapacity. In the future competition, the pattern of” the strong are stronger, and the weak are weaker “may appear, and the industry concentration is expected to be further improved. The market scale of power lithium battery industry is expected to continue to grow in 2021. ” United credit said.
Reporter Dong Tianyi editor sun Lei Xia Zhijian Du Hengfeng Xiao Yong