Why is lithium battery electrolyte always sold out?

Brief Introduction of 1. Electrolyte Industry

1. Industry Profile

As one of the four main components of lithium-ion batteries (positive electrode, negative electrode, separator, electrolyte), the electrolyte plays a vital role in the performance of lithium batteries (such as capacity density, cycle performance, rate performance, storage performance, etc.). As the medium of lithium ion transmission in the battery, the electrolyte is connected to the positive and negative electrodes of the battery, which not only has high lithium ion conductivity, but also has excellent electronic insulation.

Lithium battery electrolyte (strictly speaking, electrolyte should be called electrolyte, part of the text called electrolyte, in fact, is a concept) according to its existence form can be roughly divided into liquid electrolyte and solid electrolyte.

The electrolyte is generally composed of high-purity organic solvents, solutes, and necessary functional additives and other raw materials under certain conditions, in accordance with a certain proportion of configuration. Solvent is the main part of electrolyte. At present, the commonly used organic solvents in the market include dimethyl carbonate (DMC), propylene carbonate (PC), diethyl carbonate (DEC), ethylene carbonate (EC), ethyl methyl carbonate (EMC), etc. In terms of solute, lithium hexafluorophosphate (LiPF6) is basically concentrated, and other types of electrolyte solute such as lithium tetrafluoroborate (LiBF4) are rarely used commercially.

Generally speaking, the organic solvent and solute in the electrolyte are easy to analyze and imitate, but the additive composition is usually difficult to analyze. It can be said that the composition of additives is the technical core of electrolyte enterprises.

Common additive categories include SEI (solid electrolyte interface film performance improvement on the surface of graphite negative electrode) film-forming additives, anti-overcharge additives, flame retardant additives, stabilizing additives, wetting additives, acid and water removal additives, and so on. Common additives include lithium bis-oxalate borate (LiBOB), lithium difluorooxalate (LiDFOB), lithium bis-trifluoromethanesulfonimide (LiTFSI) and lithium bis-fluorosulfonimide (LiFSI).

Taking LiFSi as an example, at present, only Japanese catalyst companies in the world have realized industrial production, and domestic fluorine batteries (listed companies on the new third board) are currently shipped in small quantities. Therefore, compared with Japanese and Korean enterprises, domestic electrolyte enterprises are in a relatively backward position in terms of additives.

2. Industry development trend

(1) Technology trends

Since the birth of the world's first commercial lithium-ion battery in 1991, lithium battery electrolyte materials have gradually developed from liquid to solid. Although the current electrolyte market is still dominated by liquid electrolytes, liquid electrolytes have certain safety risks. Therefore, the development of electrolytes such as short circuit prevention, overcharge, thermal runaway and flame retardant is the key to the safety of power batteries. However, it is necessary to develop such electrolyte products, at present, the giant companies in the industry, such as Ube of Japan, think it is difficult, so many scientific research institutions and enterprises have decided to find another way to develop solid electrolyte technology. In recent years, solid electrolyte technology has made great progress.

Since the solid electrolyte can also act as a separator, all-solid-state lithium-ion batteries generally do not require separator materials. Therefore, if all-solid-state lithium-ion batteries are put into commercial application on a large scale, it will greatly affect the development of the existing separator material industry.

(2) Industry trends

As the core technology of electrolyte products lies in additives, so the current global electrolyte giants such as Mitsubishi Chemical, Japan's Ube, Samsung SDI, etc. have their own unique additive technology, through the purchase of raw materials and then appropriate processing and modification before sale. Therefore, the future development trend of the electrolyte industry will gradually show that enterprises master the core technology, reduce enterprise costs and improve production efficiency through outsourcing processing.

Global Status Analysis of 2. Electrolyte Industry

1. Global Production and Sales Analysis

From the perspective of global electrolyte sales in recent years, it has shown a trend of steady and high-speed growth. Although the demand for traditional 3C lithium batteries has gradually slowed down, with the development of the new energy automobile industry, it has brought new growth to the lithium battery industry. Power, thus driving the growth of the electrolyte industry.

Data source: Sadie consultant, high-tech lithium battery.

Global electrolyte sales increased from 38700 tons in 2011 to 142800 tons in 2016, with a compound annual growth rate of 29.84 per cent.

For the analysis of the actual demand of the electrolyte industry, we calculate the demand for electrolyte materials over the years according to the global lithium battery shipments and the data of 1.2KG of electrolyte per KWH lithium battery:

Then conduct global sales and actual demand analysis:

 

Data source: CCID Consulting, True Lithium Research

Judging from the data over the years, except that supply is less than demand in 2015 and supply and demand are in a tight balance in 2016, supply is greater than demand until 2014. Global electrolyte demand increased from 32000 tons in 2011 to 142400 tons in 2016, with a compound annual growth rate of 34.79. Overall, global demand growth is greater than sales growth, but with the large-scale expansion of Chinese enterprises, this phenomenon is expected to reverse.

2. Global production distribution

In the early stage of the development of the electrolyte industry, only a few foreign enterprises in the world, such as Yubu Xingshan, Mitsubishi Chemical, Toyama Pharmaceuticals, Merck and so on, were able to produce. However, with the development of the industry, especially the development of China's 3C consumption field and the new energy automobile industry, the share and position of Chinese electrolyte enterprises in the international market have gradually become prominent. According to the data in recent years, China's market share has gradually increased, from 43.37 in 2011 to 62.18 in 2016, while the market share of Japanese and Korean enterprises has gradually shrunk.

Data source: Sadie consultant, real lithium research (since the annual reports of Japanese and Korean enterprises do not disclose the sales data of their electrolyte business over the years, we can only analyze the total proportion of Japanese and Korean enterprises due to the lack of data here, forget your understanding)

Analysis of Domestic Status of 3. Electrolyte Industry

1. Domestic production and marketing analysis

After years of continuous process improvement and technology accumulation, China's electrolyte products not only from the output of sustained growth and product quality has reached the international advanced level. In recent years, the sales volume of China's electrolyte market has increased rapidly, from 16800 tons in 2011 to 88800 tons in 2016, with a compound annual growth rate of 39.51.

Data source: Data collection of electrolyte-related listed companies, compiled by New Vision Studio.

Since 2014, with the explosive growth of the new energy vehicle industry, the demand for electrolyte for power batteries has surged. As one of the essential materials for lithium batteries, electrolyte is expected to grow further with the rapid development of the new energy vehicle industry in the next few years.

In terms of electrolyte demand, we analyze the demand data of domestic cathode materials according to the global electrolyte demand analysis method.

Then the domestic electrolyte materials sales and demand analysis:

 

Data source: New Vision Studio collation, truth research

From the perspective of domestic electrolyte sales and demand estimates in recent years, my country's electrolyte manufacturers have not only been able to meet the needs of domestic lithium battery companies, but are also accelerating the development of the international market. However, for the domestic electrolyte market, the total supply of the industry is far greater than the demand of the industry, so it is expected that the domestic electrolyte market will show an industry trend of oversupply in the next few years.

In 2016, the total sales volume of China's lithium battery electrolyte industry will reach 70% in the world. Judging from the sales scale of enterprises, Guotai Huarong (Jiangsu Guotai) will reach 18024 tons, ranking first, followed by two to five places, which are heaven-sent materials, Xinzhoubang, Tianjin Taurus and Sugiyama Energy.

Data source: compiled by New Vision Studio (red data is partly due to companies not disclosing speculative data, and also due to some companies not disclosing sales data, we measure based on revenue/average market price)

 

Data source: New Vision Studio

The market concentration of the top five enterprises decreased from 78.45 in 2015 to 76.36 in 2016, and the concentration showed a slight downward trend, indicating that many small and medium-sized electrolyte enterprises showed obvious signs of expansion, but the top five enterprises still occupied more than 2/3 of the market share and were in a monopoly position in the market. It is speculated that the market pattern of the strong electrolyte industry will continue in the next few years.

2. Status analysis of lithium hexafluorophosphate

Lithium hexafluorophosphate is the main solute material in the electrolyte production process, so its importance is self-evident. We summarize the relevant production capacity of domestic lithium hexafluorophosphate in the next two years, and then briefly analyze this segment of the raw material industry through demand analysis.

Data source: New Vision Studio

According to the planning of many lithium hexafluorophosphate enterprises (generally speaking, the expansion cycle of lithium hexafluorophosphate is 1-2 years), the total production capacity is expected to be about 38100 tons in 2018, an increase of 172 over 2016. On the demand side, according to industry statistics, 1 ton of lithium hexafluorophosphate can produce 8 tons of electrolyte, we based on the domestic electrolyte sales over the years, to measure capacity and demand data, analysis:

Data source: New Vision Studio (actual estimated production is based on capacity multiplied by 60% actual capacity utilization)

Generally speaking, the release cycle of lithium hexafluorophosphate production capacity is about 1-2 years, and the rapid development of the new energy automobile industry in the past two years, resulting in the shortage of lithium hexafluorophosphate, will end with the substantial expansion of relevant enterprises, and the price of lithium hexafluorophosphate has continued to decline recently.

Analysis of Foreign Electrolyte Enterprises in 4.

1. Mitsubishi Chemical

Mitsubishi Chemical Corporation is an integrated company formed by the merger of Mitsubishi Chemical Corporation and Mitsubishi Oil & Chemical Co., Ltd. on October 1, 1994. In recent years, Mitsubishi Chemical's sales have ranked first in the Japanese chemical industry.

In terms of electrolyte business, Mitsubishi Chemical and Japan's Ube merged their electrolyte business in China in 2017. At present, the company has an electrolyte production capacity of about 20000 tons (Ube Chemical is similar to its production capacity).

2.LG Chem

In the half century since its establishment in 1947, LG Chem has grown into Korea's largest integrated chemical company leading the Korean chemical industry through continuous innovation and research and development activities. It has dozens of branches in North America, Europe, and Asia, and employs more than 15,000 people worldwide.

LG Chem is centered on three departments: petrochemical, battery, and information electronic materials. Since its global sales of US $7.7 billion in 2004, LG Chem has become one of the world's top ten chemical companies. In the electrolyte business, the current production capacity is about 10000 tons.

3. Suk Sung, Korea

South Korea's electrolyte materials business was purchased from Samsung Group's First Wool City. With the continuous expansion of the market share of Samsung SDI and LG Chemical, South Korea's two major lithium-ion battery giants, in the past two or three years, South Korea's electrolyte sales are also growing rapidly, ranking first in the world with Mitsubishi Chemical.

South Korea's largest customer is Samsung SDI, in addition, LG Chemical, Dongguan New Energy are also South Korea's main customers. In the electrolyte business, the current production capacity is about 15000 tons.

(Due to the large scale of Japanese and Korean enterprises involved in electrolyte business, there are few data disclosed in their annual reports on electrolyte, so we only use a small chapter to talk about it, hoping that investors will understand)

Analysis of Domestic Electrolyte Enterprises in 5.

As there are many domestic electrolyte enterprises (more than a dozen), here we only analyze the top five enterprises, and the relevant situation of the rest of the enterprises has been mentioned in the chapter on the analysis of the current situation in China, so this chapter will not say more.

1. Jiangsu Guotai

The company's current main business is supply chain services and chemical new energy business. Zhangjiagang Guotai Huarong Chemical New Materials Co., Ltd., a subsidiary of the company, mainly produces lithium-ion battery electrolyte and silane coupling agent. As a forerunner in the domestic lithium-ion battery electrolyte industry, it has certain advantages in research and development, production, and sales. The sales volume of lithium-ion battery electrolyte has been among the best in China and the world for many years. As of 2016, the company's total assets are 14.2 billion yuan, operating income is 29.7 billion yuan, net profit is 0.541 billion yuan, and the current market value is 16.3 billion yuan (as of August 3).

In terms of electrolyte business, the company's revenue in 2016 was 1.093 billion yuan and its sales volume was 18024 tons. According to the company's relevant capacity planning, the company is expected to form a total electrolyte capacity of 30000 tons by 2018.

Data source: Company announcement

2. Heavenly Materials

The company's main business is the research and development, production and sales of new fine chemical materials, which belongs to the fine chemical industry. The company is mainly engaged in the research and development, production and sales of daily chemical materials and specialty chemicals, lithium-ion battery materials and silicone rubber materials. As of 2016, the company's total assets are 2.3 billion yuan, operating income is 1.837 billion yuan, net profit is 0.396 billion yuan, and the current market value is 16.1 billion yuan (as of August 3).

In the electrolyte business, the company covers lithium hexafluorophosphate and electrolytes. In 2016, the company continued to improve the efficiency of the production and supply system and actively promoted the construction of new projects, of which the fund-raising project 6000t/a liquid lithium hexafluorophosphate, new lithium salt and other projects into the final stage. In 2016, the company's electrolyte business revenue was 1.225 billion yuan, with a sales volume of 17728 tons. At present, the company's electrolyte production capacity is 20000 tons, and there is no new electrolyte production capacity in the future.

Data source: Company announcement

3. New Zeus

The company's main business is the research and development, production, sales and service of new electronic chemicals and functional materials. The main products include capacitor chemicals, lithium battery chemicals, organic fluorine chemicals, and semiconductor chemicals. As of 2016, the company's total assets are 2.8 billion yuan, operating income is 1.6 billion yuan, net profit is 0.256 billion yuan, and the current market value is 9.3 billion yuan (as of August 3).

In the electrolyte business, the company's 2016 revenue of 0.856 billion yuan, sales of 14793 tons, so far the company's production capacity of about 20000 tons.

Data source: Company announcement

4. Tianjin Jinniu

Tianjin Jinniu Power Material Co., Ltd. is a professional supplier of lithium-ion battery materials integrating R & D, production, sales and service. It is also a state-controlled high-tech enterprise. The company is the earliest domestic enterprise with independent intellectual property rights and industrialized production of lithium hexafluorophosphate. It is also the main drafting unit of China's lithium-ion battery lithium hexafluorophosphate and lithium-ion electrolyte industry standards.

In the electrolyte business, the company sold 10000 tons in 2016 and currently has a production capacity of about 10000 tons.

Data source: CCID Consulting, China Battery Network

5. Shanshan shares

The company's business is divided into new energy business and non-new energy business, of which the new energy business covers the upstream and downstream industrial chain of lithium-ion new energy, which is the company's main source of performance and development focus, mainly including lithium battery materials, new energy vehicles and energy management services business.

Non-new energy business mainly includes clothing brand operation, financial and venture capital business. As of 2016, the company's total assets are 14.6 billion yuan, operating income is 5.5 billion yuan, net profit is 0.33 billion yuan, and the current market value is 24.7 billion yuan (as of August 3).

In the electrolyte business, the company sold 7241 tons in 2016, with revenue of 0.419 billion billion yuan, up 121.05 percent year-on-year. In addition, the company is currently building 2000 tons of lithium hexafluorophosphate and 20000 tons of electrolyte projects. It is expected that the electrolyte will be put into trial production in the third quarter of 2017, and lithium hexafluorophosphate will be put into trial production in 2017. It is expected that the company will form an electrolyte production capacity of 30000 tons by 2018.

Data source: Company announcement

Analysis on the Development Prospect of 6. Industry

According to the current domestic and global electrolyte production capacity and demand analysis, it is not difficult to see that the entire electrolyte industry is currently in an oversupply situation, and this phenomenon is expected to continue in the next few years.

With the rapid development of the new energy vehicle industry, we assume that the global production and sales of new energy vehicles will be 3 million in 2020, with an average battery capacity of 40KWH per vehicle, so the global demand for vehicle power batteries is expected to be 120GWH by 2020. We assume that vehicle power batteries account for 50% of the total lithium ion batteries, so the global demand for lithium ion batteries will be about 240GWH by 2020, which is calculated by 1.2kg of electrolyte material per KWH lithium battery, global electrolyte demand will reach 288000 tons in 2020, corresponding to the global sales of 142800 tons in 2016, with a compound annual growth rate of 19.17.

We assume that the domestic sales volume in the global electrolyte market accounts for about 80%, so the corresponding domestic electrolyte sales volume in 2020 is about 230400 tons. According to the annual electrolyte demand growth of about 20%, we estimate that the global electrolyte demand in 2018 is about 205600 tons, corresponding to 80% of the Chinese market share of about 164500 tons.

According to the capacity planning data of the top ten domestic electrolyte companies, the overall production capacity of the industry will be about 170500 tons by 2018. Therefore, we expect that the overall status of the global and domestic electrolyte industry will show an oversupply by 2019.

In addition, in terms of lithium hexafluorophosphate subdivision industry, we estimate the demand for about 20600 tons of lithium hexafluorophosphate according to the demand for 164500 tons of electrolyte in 2018, which is also in a state of overcapacity corresponding to the production capacity of 38100 tons in 2018. Therefore, we expect that before 2019, the industry state of lithium hexafluorophosphate will be the same as that of electrolyte, and the supply will exceed the demand.

7. industry investment advice

Based on the industry expectation of temporary surplus in the electrolyte industry in the next few years, we recommend to pay attention to the relevant listed companies with diversified layout, such as fir shares, with positive materials and electrolytes (electrolyte capacity release in the future) and other new energy vehicles multi-industry chain layout of listed companies.

8. industry risk tips

1. The development of lithium battery industry is not as expected;

2. Electrolyte manufacturers concentrate on expanding production in the short term, resulting in serious overcapacity in the industry, which causes enterprises to launch price wars;

Domestic electrolyte additive technology can not break through, resulting in technical aspects limited by Japanese and Korean enterprises.