At the 2024 SMM 19th Lead and Zinc Conference and Lead and Zinc Technology Innovation Forum - Main Forum, Hu Jian, Senior Vice President of SMM, talked about the relevant topics of "Opportunities and Challenges for the Lead and Zinc Industry from the Rise of New Energy". He said that China's photovoltaic market is the world's largest incremental market, the future will continue to dominate the new and cumulative capacity, the photovoltaic industry zinc-aluminum-magnesium coating consumer market is broad, and zinc-aluminum-magnesium coating is widely used in the photovoltaic industry, the penetration rate is increasing rapidly, the future is expected to drive zinc consumption;
Under the goal of carbon neutrality, the rise of the "new three" (photovoltaics, batteries, and new energy vehicles) will bring new momentum for the development of lead and zinc
The development status of China's lead and zinc industry
In terms of zinc, China's refined zinc supply will reach about 7 million tons in 2023, a significant increase compared with 2022.
In terms of lead, from 2020 to 2023, the supply of refined lead has shown a steady increase, and the domestic supply of refined lead in 2023 will be about 7.74 million tons. In terms of consumption, lead-acid batteries contribute to the main consumption, accounting for as much as 90%.
The rise of new energy: challenges and opportunities coexist in the lead and zinc industry
The development of new energy drives the future zinc consumption, the blue ocean of energy storage accelerates the rapid development of lead-carbon batteries, and green and low-carbon can lead the sustainable development of the lead-zinc industry.
The development of new energy drives the future consumption of zinc
Under the global green energy transition, photovoltaic installed capacity has grown steadily, and China is the world's largest incremental market
In 2023~2030, the global new installed capacity of photovoltaic will continue to grow, with a cumulative installed capacity of nearly 4,500GW and a compound annual growth rate of 22%.
SMM predicts the cumulative installed capacity of global photovoltaics from 2023 to 2030, and SMM believes that the global deployment of renewable energy-based energy systems will be accelerated. SMM predicts that from 2023 to 2030, China will account for about 6 percent.
Looking at China's photovoltaic market alone, China's photovoltaic market is the world's largest incremental market, with 217GW of new installed capacity in 2023, accounting for 51.67% of the world's new capacity, and will continue to dominate the new and cumulative capacity in the future.
Zinc-aluminum-magnesium coating is widely used in the photovoltaic industry, and the penetration rate is increasing rapidly, which is expected to drive zinc consumption in the future
The zinc-aluminum-magnesium alloy coated bracket has high surface hardness, strong corrosion resistance of the coating, and has the self-healing function of the incision, which can effectively form a section protection for machining and meet the C3/C4 anti-corrosion standards.
It is reported that in China, in terms of the downstream consumption of zinc-aluminum-magnesium alloy, the photovoltaic industry accounts for as much as 58%, and the automotive industry accounts for about 18%, and the global zinc-aluminum-magnesium alloy downstream consumption accounts for 30%, the automobile industry accounts for 20%, and the household appliances account for about 15%.
According to the data, in 2023, the penetration rate of zinc, aluminum and magnesium used in photovoltaics in major regions of the world will be the most leading, with a penetration rate of 45%, and it is expected that the penetration rate is expected to reach about 80% by 2030, and the penetration rate of zinc, aluminum and magnesium used in photovoltaics in the Asia-Pacific region (excluding China) may reach about 61% by 2030.
The increase in the penetration rate of new energy vehicles will drive the growth of zinc oxide demand in the rubber industry
Vehicle weight:
Due to the large weight of the battery pack, the mass of an electric passenger car is 200~500kg higher than that of a fuel vehicle of the same specification, which requires the tire to have higher compressive capacity and wear resistance;
In addition to the redesign of the mechanical structure of tires, zinc oxide, as a reinforcing agent for tire rubber, is used in higher amounts in the tire formulation of new energy vehicles.
Fast start-up:
The electric motor of an electric vehicle can output peak torque at start-up, which is generally faster than that of a gasoline vehicle. Tires will accumulate a lot of heat in a short period of time, which will affect the performance and life of tires, and it is necessary to improve the heat dissipation performance of tires in a targeted manner.
Zinc oxide is used as a heat dissipation agent for tire rubber, and the amount added to the tires of new energy vehicles is therefore increased.
SMM expects that from 2023 to 2028, the demand of the downstream industry of zinc oxide in mainland China is expected to increase by about 47,000 tons.
Due to the difference in vehicle weight, torque and tire noise requirements, new energy and traditional fuel vehicles have begun to differentiate. Tire manufacturers have redesigned new energy vehicle tires in terms of mechanical structure and product formulation;
As a reinforcing agent, wear-resistant agent and radiator for tires, the increase in the penetration rate of new energy vehicles will drive the growth of zinc oxide demand in the rubber industry;
As the penetration rate of electric commercial vehicles and construction machinery increases, the absolute amount of zinc oxide that needs to be added to their tires (TBR and OTR) will be larger, which is conducive to further driving the demand for zinc oxide in the tire industry.
The blue ocean of energy storage accelerates the rapid development of lead-carbon batteries
Lithium batteries and sodium batteries are menacing, and the application of traditional lead-acid batteries is facing challenges
Traditional applications for lead-acid batteries include batteries for two-wheeled electric vehicles and car starters. Currently, both downstream applications are challenged by lithium or sodium batteries;
Since 2009, BYD has begun to develop a 12V lithium iron phosphate battery system. Compared with traditional lead-acid batteries, lithium iron phosphate starter batteries have the advantages of long life, light weight and compactness. In 2023, BYD announced that all its models will enter the era of lead-free vehicles.
In terms of two-wheeled vehicles, as the cost decreases in 2023, the penetration rate of lithium batteries has begun to recover and will continue to rise due to its advantages of lightness and range, compressing the market share of lead-acid batteries, and SMM predicts that by 2027, the global penetration rate of lithium batteries for electric two-wheelers and self-balancing vehicles is expected to reach about 46%.
At the same time, sodium-ion batteries are more suitable for two-wheeled electric vehicles, A00 electric vehicles and household energy storage markets due to their high safety, low cost and relatively low energy density. In the future, the two-wheeler market will also see sodium-ion batteries more and more frequently.
With the rapid expansion of the market scale and the broadening of application scenarios, the safety and construction cost of energy storage technology have been paid more and more attention, and lead-carbon batteries will be developed by virtue of their advantages
The policy drives the application of lead-carbon batteries in industrial and commercial energy storage, UPS backup and other scenarios
In June 2022, the National Energy Administration (NEA) announced the 25 Key Requirements for Preventing Electricity Production Accidents (2022 Edition) (Draft for Comments). Among them, the relevant rules for lithium batteries, lead-carbon batteries and energy storage stations include:
(1) Medium and large electrochemical energy storage power stations shall not use ternary lithium batteries and sodium-sulfur batteries, and power batteries should not be used for cascade utilization;
(2) The lithium-ion battery equipment room shall not be installed in a densely populated place, and shall not be installed in a building or underground space where people live or move. The lithium-ion battery equipment room should be arranged in a single layer, and it is advisable to use a prefabricated cabin. In the station-type lithium-ion battery equipment room, the battery capacity of a single fireproof zone should not exceed 6MW·h, and when it exceeds 6MW·h, a fixed automatic fire extinguishing system should be set up indoors
Safety: In special environments where the use of lithium batteries is restricted, such as crowded places or high-value equipment rooms, lead-carbon batteries have stronger applicability and fewer potential safety hazards in terms of backup power and energy storage projects.
Cost advantage: The current construction cost of lead-carbon batteries is about 0.35-1 yuan/Wh, which has a great economic advantage compared with the cost of 0.8-2 yuan/Wh for lithium-ion batteries. At the same time, with the continuous maturity of lead-carbon battery technology and the continuous reduction of cell cost, the economic advantage of using lead-carbon battery as electrochemical energy storage technology is expected to continue to increase.
Lead-carbon batteries have significant advantages in construction costs and have become a major player in China's energy storage market
According to the comparison of the performance of different electrochemical energy storage, lead-carbon batteries are far ahead of the batteries with a construction cost of 350-1,000 yuan/KWh, and have become a major player in China's energy storage market.
Green and low-carbon leads the sustainable development of the lead and zinc industry
Electricity was included in the national carbon trading market in 2021, and the lead and zinc industry will also be gradually included in the future
The power generation sector is China's largest carbon emitter and was among the first to be included in the carbon trading market in 2021. During the 14th Five-Year Plan period, high-energy-consuming industries such as non-ferrous metals will be gradually included in the national carbon market;
In March ~ April 2024, the Ministry of Ecology and Environment (MEE) solicited public comments on the guidelines for accounting and reporting of greenhouse gas emissions for enterprises in the aluminum and cement industries and the technical guidelines for the verification of greenhouse gas emissions of enterprises, indicating that the electrolytic aluminum and cement industries are likely to be included in the national carbon market next.
In accordance with the principle of "mature one, one incorporated" in high-energy-consuming industries, different items in the non-ferrous industry will be included in the national carbon market step by step. The aluminum industry will be the first to be included in the national carbon market, and copper, zinc and lead will be included when the conditions are ripe in the future.
With the help of new energy, lead and zinc smelters can make profits in the carbon emission trading market
Enterprises that are included in the national carbon market and emit more than 26,000 tons of CO2e per year will be included in the national carbon market and can participate in allowance trading (CEA). Enterprises that are not included in the national carbon emission trading market cannot participate in the national carbon emission trading market;
So far, only the power generation sector has been included in the national carbon market. According to the Ministry of Ecology and Environment's plan, during the 14th Five-Year Plan period, eight energy-intensive industries, including chemicals, building materials, iron and steel, nonferrous metals and papermaking, will be included in the national carbon market. Due to the high emissions of the non-ferrous industry and the fact that the EU CBAM covers aluminum products, the non-ferrous industry is likely to participate in the first round of carbon market expansion.
For example, the lead-zinc smelting industry can reduce carbon emissions through process upgrades, equipment electrification, self-built photovoltaic power stations, etc., and will be able to set aside excess allowances to sell for profit;
Smelters can also make a profit by strengthening carbon asset management and using trading carbon allowances and carbon emission reductions.
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