Because "there are mines at home", South America, which has always been low-key in the global economic map, has suddenly gathered the eyes of many power battery industry chain companies led by China. In July 2021, Ganfeng Lithium launched a tender offer to Canadian Millennium Lithium, but was unexpectedly "intercepted" by its domestic counterpart Ningde Era. Just when many people thought that the millennium lithium industry was about to be acquired by the Ningde era, the American lithium industry fell from the sky and finally completed the acquisition. The bidding drama between "Ning Wang" and "Lithium King" after several reversals can be regarded as the epitome of the heating up battle for lithium resources.
With the wave of electric vehicles with the trend of subversion, the status of lithium resources has suddenly changed, pinching the lifeblood of the development of new energy vehicles. Since the beginning of this year, the global delivery of electric vehicles has continued to hit new highs, and the situation of lithium batteries exceeding demand has become increasingly prominent. In fact, the problem of tight supply and demand for lithium batteries is not limited to the present, and the strong demand in the long term has also strengthened the rationing and value of the resource side.
The "Securities Daily" reporter noted that since the beginning of this year, the veteran car companies in Europe, the United States, Japan and South Korea have set a clear timetable for the suspension of fuel vehicles. China also released the Carbon Peak Action Plan by 2030 on October 26, which for the first time clarified the long-term goal: by 2030, the proportion of new new energy and clean energy powered transportation vehicles will reach about 40%. The policy clarifies the development prospects of related industries, power battery manufacturers have announced the doubling of production expansion, and the 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 aggravated, prompting lithium mine quotations to continue to rise.
Yu Qingjiao, secretary general of the Zhongguancun New Battery Technology Innovation Alliance, said in an interview with the Securities Daily reporter that lithium ore's right to speak in the industrial chain is crucial, the cost advantages of enterprises with high-quality lithium resources are highlighted, the profit elasticity will be fully released, and the downstream enterprises with shortcomings in the layout of resources will be under pressure on profits.
Global lithium resources not only show the characteristics of regional distribution concentration, but also show the characteristics of high concentration of control. According to a research report released by Guotai Junan Securities, 77% of the global lithium industry market share is controlled by the five major companies. Among them, China's Ganfeng Lithium and Tianqi Lithium accounted for 16% and 14% of the market respectively, and the remaining 47% of the market share was divided by the Three Companies of Yabao ALB (accounting for 25%), Chilean Mining and Chemical SQM (accounting for 15%), and American Lifen (accounting for 7%). The opponents of domestic battery manufacturers are not limited to the domestic "lithium industry double males", but also include a number of overseas lithium giants.
"From the perspective of supply stability and cost control, controlling lithium ore is controlling core raw materials." In the view of puritanism, in the context of the deterministic growth of downstream lithium battery demand, lithium ore resources have become the primary premise of market competition.
Lithium battery companies are busy expanding production
It is difficult to change the imbalance between supply and demand for the time being
According to data released by the China Association of Automobile Manufacturers, from January to November this year, the cumulative sales volume of the new energy vehicle market reached 2.99 million units, an increase of 166.8% year-on-year. The latest forecast of the China Automobile Association is that the sales of new energy vehicles this year are expected to exceed 3.4 million units.
With the sales of new energy vehicles increasing sharply, the demand for automotive power batteries and energy storage batteries has also increased significantly, short-term supply is in short supply, and long-term demand is clear, which has achieved the fundamental logic of unlimited scenery in the lithium battery industry this year. "Charging towards production capacity" has become the most core topic of the development of the lithium battery industry in 2021.
According to the "Securities Daily" reporter, from January to October 2021, the installed capacity of global power batteries reached 225GWh, an increase of 116% year-on-year. Among them, China's power battery loading volume was 107.5GWh, an increase of 168.1% year-on-year.
The demand for energy storage batteries has also grown significantly. Taking Canadian Solar as an example, the company, as a representative of global energy storage companies, from January to September this year, the energy storage projects under construction increased from 0.9GWh to 2.9GWh, and the reserve projects increased from 6.5GWh to 21GWh to prepare for the rapid growth in demand for energy storage batteries.
On the supply side, compared with the substantially increased market demand, the growth of lithium battery production capacity does not match. The "Securities Daily" reporter noted that including ningde times, BYD, hive energy, etc., lithium battery suppliers have only begun to expand production capacity on a large scale since the end of last year. However, the expansion of lithium battery production capacity has a certain lag, plant construction and equipment installation and construction cycle takes 6 to 9 months, capacity climbing cycle takes 3 to 6 months, to achieve a certain capacity utilization rate (involving technical level, production experience and product structure) also need time, resulting in lithium battery supply "far water is difficult to quench the near thirst", supply and demand continue to be unbalanced.
Lithium hexafluorophosphate, as the most important component of the power battery electrolyte (accounting for about 43% of the total cost of the electrolyte), has seen a significant increase in market demand this year, and the price has climbed all the way. Statistics show that the market price of lithium hexafluorophosphate in September 2020 is about 70,000 yuan / ton, but as of December 22, 2021, the market price of lithium hexafluorophosphate has exceeded 500,000 yuan / ton. Even so, many production enterprises are basically out of stock at present, and the spot is tight, usually mainly to deliver orders.
"At present, several industry leaders who have issued supply and expansion announcements, their procedures such as project establishment, approval, and compliance, cannot be approved in a year and a half." A lithium battery industry practitioner told the Securities Daily reporter that the lithium battery listed companies that are currently expanding production are in the stage of paying for equipment, but the progress of equipment processing is slow. In order to ensure the supply of raw materials, since May this year, the major leading listed companies in the lithium battery industry have signed a number of long-term agreements with lithium hexafluorophosphate, and the collection method has also moved closer to the cash spot method.
"Behind the continuous rise in the price of lithium hexafluorophosphate is the epitome of the continued popularity of the new energy vehicle and power battery markets." As the backward production capacity is gradually cleared, the market capacity and orders will move closer to the high-quality leading enterprises. Cao Bin, chairman of Tianzhu Hongfluoro Lithium Industry, predicted in an interview with the "Securities Daily" reporter that lithium hexafluorophosphate will remain high in 2022.
The global lithium battery production capacity is gradually released
In 2025, the planned production capacity will exceed 2500GWh
According to the forecast of many institutions, the global demand for lithium batteries will exceed 1500GWh in 2025. Estimated at an average capacity utilization rate of 60%, the corresponding capacity is 2500GWh. According to the incomplete statistics of the "Securities Daily" reporter, the total planned production capacity of the world's major lithium battery companies in 2025 has exceeded 2500GWh.
Since receiving orders from Tesla in 2020, CATL has announced 8 power battery expansion projects. According to the data disclosed in this year's semi-annual report, as of the end of June 2021, the annual production capacity of power batteries in the Ningde era is 65.45GWh, and the production capacity under construction has reached 92.5GWh. A number of brokerage research reports predict that the capacity planning target of the Ningde era in 2025 is close to 600GWh; the planned capacity of LG will reach 400GWh. In addition, the relevant person in charge of Hive Energy said in an interview with the Securities Daily reporter that the company has launched a new strategic plan, and it is expected that the planned production capacity in 2025 will exceed 200GWh.
In terms of demand for power batteries, if the global passenger car sales reach 80 million units in 2025, the corresponding electric vehicle sales will be 20 million units based on the electrification penetration rate of 25%. If the average power consumption of each electric vehicle is 40KWh, the battery demand for electric passenger cars alone is expected to reach 800GWh, which does not include the share of electric commercial vehicles, electric two-wheelers, electric construction machinery, electric ships and other segments.
In terms of energy storage battery demand, according to the International Energy Agency and the China Photovoltaic Industry Association, the global installed capacity of photovoltaics in 2025 is conservatively estimated to reach 1810GW; according to the Global Wind Energy Council, the global installed capacity of wind power is expected to reach 1210GW in 2025. According to this calculation, by 2025, the total installed capacity of photovoltaic and wind power new energy in the world will be 3020GW. If the energy storage penetration rate of 25%, the average installed rate of 20% and the configuration of energy storage for 2 hours are calculated, the demand for energy storage batteries brought by photovoltaic and wind power sides alone will reach 300GWh. In addition, subdivisions such as grid-side energy storage and user-side energy storage (including home energy storage) will also generate certain demand for energy storage batteries.
From the long-term global market demand to the global production capacity needs, it can be seen that the strategic significance behind the production capacity planning goals of the head enterprises is established: that is, the production capacity planning is established, and the systematic work such as capital financing, equipment procurement, supplier construction, and downstream strategic customer development is supported. The head enterprise publicizes the production capacity target to the outside world, which can obtain a higher valuation for financing, obtain more favorable conditions for the procurement of equipment and raw materials, and enhance the strength and image of customers.
"Only effective production capacity that can keep up with the development situation of the industry and meet the market demand is the real production capacity." Fang Jianhua, president of the National Science and Technology Achievement Transformation Fund New Energy Vehicle Venture Capital Sub-fund, told the Securities Daily reporter: "As of now, one of the biggest problems facing the power lithium-ion battery industry is structural overcapacity. ”
In Fang Jianhua's view, in the case of structural overcapacity of power lithium-ion batteries, it is a very big risk to local governments, banks and companies. Battery technology has advanced by leaps and bounds, and the capacity currently under construction is likely to become a pile of scrap iron in two or three years. Fang Jianhua suggested: "We should appropriately control the investment structure, conform to the general trend of technological progress, and plan the actual production capacity according to the characteristics of the development of the Chinese market." ”
Upstream resources are a place of contention
Lithium mine battle is a "war" that cannot be lost
On the one hand, lithium prices have soared all the way, on the other hand, battery companies are fully productive, but what does not match the increase in battery installed capacity is that battery companies have not achieved corresponding profit growth.
The "Securities Daily" reporter observed that the financial reports recently released by 5 listed companies such as Ningde Times, Yiwei Lithium Energy, Guoxuan Hi-Tech, Sunwoda, and Penghui Energy show that the gross profit margin of only Cataline Times was positive in the third quarter of this year. Among them, the gross profit margin of Ewell Lithium Energy in the third quarter of this year was 21.53%, which has declined for four consecutive quarters, down nearly 10 percentage points from the same period last year; the gross profit margin of Guoxuan Hi-Tech and Penghui Energy has declined for two consecutive quarters, with a decline of 9% and 3% respectively.
In stark contrast, upstream material suppliers ushered in a performance explosion. Among them, Ganfeng Lithium, one of the "two males of the lithium industry", achieved revenue of 7.04 billion yuan in the first three quarters of this year, an increase of 81.19% year-on-year; and achieved a net profit attributable to the mother of 2.473 billion yuan, a year-on-year increase of 648.24%. Tianqi Lithium has also gradually come out of the debt haze, although the net profit is still losing, but the stock price has soared 175% from the beginning of the year.
Although the Ningde era can still rely on its industry position to sign a long-term agreement to lock in the cost of materials and maintain its own profitability, the reality that battery manufacturing enterprises have become "hit workers" of upstream resource enterprises is beyond doubt. For battery manufacturing enterprises, in order to compress costs and compete for the right to speak in the industrial chain, "grabbing mines" has become a step that must be taken.
For local upstream enterprises, the escalation of the struggle with midstream manufacturers in the future seems inevitable, and resource reserves will directly affect the current operating performance and future development potential. "In the final analysis, it is still a matter of resources, that is, there are not enough mines." A relevant person close to Ganfeng Lithium told reporters that upstream companies buying lithium ore in large quantities overseas can ensure that the price of raw materials in the future is relatively stable and can lock in these resources. Downstream battery manufacturing enterprises "sweep the mine", the core strategy is to ensure the continuity and stability of lithium raw material supply.
It is worth noting that the European car manufacturing powers led by Germany have begun to pay attention to the battery industry and gradually implement strategies to prevent excessive dependence on foreign parts suppliers. The United States, as the former hegemon of automobile production and sales, also announced the development plan of new energy vehicles in August this year, and released the "National Lithium Battery Blueprint (2021-2030)", the goal is to build the domestic lithium battery raw material processing capacity in the United States and reduce the dependence on sensitive materials.
In this regard, Luan Zhengming, director of the China Mining Federation and executive director of the Legal Professional Committee, suggested that the competition for mineral sources by Chinese enterprises should not be too long, and it is taboo to have a large tail. Moreover, downstream enterprises must not blindly follow the trend, but must do what they can. After the introduction of relevant policies in various countries, the forerunners in the industry are gradually improving the subsidy policy system, and the latecomers are also struggling to catch up. With the participation of all parties in the competition, the original lithium battery industry pattern will face reshaping. (Reporter Gong Mengze)
Source: Securities Daily
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