New Energy Vehicles Take Off

In 2016, when 176 contracting parties around the world signed the Paris Agreement to address climate change in Paris, the transformation of automobiles to electrification has become an irreversible historical trend in the world.

Nowadays, the sales of new energy vehicles have once again staged the "return of the king". As traditional cars have experienced the "chip robbery" and the dual-carbon economy, car companies have released a timetable for the suspension of fuel vehicles. New energy vehicles are increasingly expected to dominate the development of the auto market.

With the rapid increase in sales of new energy vehicles, the demand for power batteries, which are the core components of automobiles, is increasing. Correspondingly, the demand for metal minerals such as lithium, magnesium, phosphorus, fluorine, cobalt and other metal elements for the production of raw batteries is also continuing to skyrocket. As a result, lithium-ion battery fluorine materials are brought to the forefront of the industry.

Since the beginning of this year, veteran car companies in Europe, the United States, Japan, and South Korea have set clear timetables for the suspension of fuel vehicles. China also issued the "Carbon Peaking Action Plan by 2030" on October 26, clarifying the long-term goal for the first time: by 2030, the proportion of new and clean energy-powered vehicles will reach about 40%. The policy has clarified the development prospects of related industries, and power battery manufacturers have announced doubling of production, and market hoarding sentiment is high. Coupled with the increase in the influence of the seller's market, the imbalance between supply and demand in the lithium battery market has been exacerbated, and the quotations of lithium battery fluorine materials have continued to rise.

Enterprises are busy expanding production, temporarily difficult to change the imbalance of supply and demand

According to data released by the China Association of Automobile Manufacturers, from January to November this year, the cumulative sales of the new energy vehicle market reached 2.99 million, a year-on-year increase of 166.8%. According to the latest forecast of the China Automobile Association, sales of new energy vehicles are expected to exceed 3.4 million vehicles this year.

On the supply side, compared with the substantially increasing market demand, the growth of lithium battery production capacity does not match. Including CATL, BYD, Honeycomb Energy, etc., lithium battery suppliers only started to expand their production capacity on a large scale at the end of last year. However, capacity expansion has a certain degree of lag. The plant construction and equipment installation construction cycle takes 6 to 9 months, and the capacity ramp cycle takes 3 to 6 months to reach a certain capacity utilization rate (involving technical level, production experience and product Structure) also takes time, causing the supply of lithium to be "difficult to quench the thirst near the water", and the supply and demand continue to be out of balance.

Lithium hexafluorophosphate is the most important part of the electrolyte for power batteries (approximately 40% of the total cost of the electrolyte). Since the beginning of this year, the market demand has increased significantly, and the price has been rising. Statistics show that the market price of lithium hexafluorophosphate in September 2020 is about 70,000 CNY/ton, but as of December 27, 2021, the market price of lithium hexafluorophosphate has exceeded 550,000 CNY/ton. Even so, many production companies currently have almost no inventory, and the spot is tight, and they usually focus on delivery orders.

"Behind the continuous increase in the price of lithium hexafluorophosphate is the epitome of the continued boom in the new energy vehicle and power battery market. As the backward production capacity is gradually cleared out, the market capacity and orders will be closer to high-quality leading companies." Tianzhu Hong Fluoride Lithium Chairman Cao Bin, it is expected that lithium hexafluorophosphate will still maintain a relatively high degree of prosperity in 2022.

Compared with lithium hexafluorophosphate, lithium bisfluorosulfonimide LiFSI has the advantages of high conductivity, high chemical stability, and high thermal stability as the electrolyte solute lithium salt, which is more suitable for the development of high-performance, wide-temperature and high-safety lithium batteries in the future The direction is the lithium salt of the next-generation lithium battery that is most likely to partially replace LiPF6. At present, LiFSI's main production capacity is concentrated in South Korea's Tianbao, Japan Catalyst, as well as my country's Kangpeng Technology, Tianci Materials, Fluorite Optoelectronics, Xinzhoubang, Yongtai Technology and other companies, with a total production capacity of less than 6,000 tons. With the increase in product discussion, domestic companies have begun to accelerate LiFSI capacity planning. At present, most of the LiFSI capacity under construction will be put into production in 2023-2025. It is expected that my country's LiFSI capacity will increase to about 110,000 tons by 2025.

PVDF can be used as a positive electrode binder and separator coating. Among them, PVDF can be used as a positive electrode binder to bond the conductive coating and aluminum foil. There is no alternative product. Therefore, with the increase in demand for downstream lithium batteries, Will drive the simultaneous growth of demand for PVDF as a positive electrode binder product. Compared with ternary materials, lithium iron phosphate has a larger molecular weight and requires more PVDF. PVDF will continue to maintain a high-prosperity operating state in the future.

The PVDF capacity construction cycle is about 1.5~2 years, with the registration time for environmental assessment and energy assessment, production line commissioning cycle, customer certification cycle, and the actual production time is expected to take more than 2 years. However, due to the relatively stable industry demand in the early stage, domestic expansion is planned PVDF companies are relatively limited, and there is very little capacity that can be effectively released from 2021 to the first half of 2022. It is expected that companies will expand their production capacity through technological transformation.

Lithium battery upstream resources have become a must, and the battle for lithium battery fluorine materials is getting fiercer

At present, relevant companies have announced new project landing and expansion plans. Behind the expansion, maintaining the supply and demand pattern will become a problem. Among them, there are not only the pursuit of profit in business, but also the rigid demand of the industry. On the one hand, the prices of 6F and PVDF have soared all the way, and on the other hand, battery companies are producing at full capacity. However, what does not match the increase in battery installed capacity is that battery companies have not achieved corresponding profit growth. Although the Ningde era can still rely on its industry status to sign long-term agreements to lock in material costs and maintain its own profitability, the reality that battery manufacturers have become "workers" for upstream resource companies is beyond doubt. For battery manufacturers, in order to reduce costs, they are fighting for the right to speak in the industry chain.

A few days ago, the subsidiary of Fluorideand Henan Nonferrous Metals Industry Co., Ltd. and Enchem Co., Ltd. signed a "purchase agreement". Enchem Co., Ltd. intends to purchase from Henan Nonferrous Metals with a total amount of not less than 1 billion yuan in the next three years. Lithium hexafluorophosphate products. Subsequently, Duofuduo and BYD signed the "Strategic Cooperation Agreement", and BYD intends to purchase from the company a total of not less than 56050 tons of lithium hexafluorophosphate products within the validity period of the cooperation agreement.

Xinzhoubang has signed a long-term supply agreement with leading power battery companies to supply long-term supplies to Samsung SDI, Sony, LG Chem, Panasonic, and domestic Lishen, CATL and other companies.

Yongtai Technology has signed a material procurement agreement with CATL to purchase lithium hexafluorophosphate, lithium bisfluorosulfonimide (LIFSI) and vinylene carbonate (VC) products from the company.

CATL purchased lithium battery-grade PVDF and R142b products from Lianchuang. The purchase quantity of R142b shall be no less than 1,700 tons in total before the end of December 2021; no less than 7,200 tons in 2022. The purchase volume of lithium battery-grade PVDF is determined based on Party B's production volume at that time. The agreement is valid from the date of signing to December 31, 2024.