Thanks to the rapid development of alternative energy vehicles in China, the core materials for the batteries are all in the spree of price rising. CCM’s here to compare the differences on the price hyping among battery grade lithium carbonate, LiPF6 and electrolyte.
Comparison on the rising price
Lithium carbonate is a necessary raw material to produce cathode materials of lithium battery and electrolyte. To produce li-ion battery needs battery grade lithium carbonate. In the early 2015, the price was about USD6, 615/t. In the end of Sep. 2015, the price rose to about USD8, 461/t. Till now, the fluctuation of price experienced 3 periods:
The first period was from the end of Sep. to the end of Oct. in 2015. What led to price to rise was that, FMC Corporation, the lithium carbonate giant, up-regulated the price of lithium carbonate by 15% worldwide from 1 Oct. 2015. Since then, the enterprises in China followed it lead and raised the price successively. Till the end of Oct., the price of lithium carbonate increased to about USD10, 769/t, up in 27% in just one month.
The second period was from Nov. to the middle of Dec. in 2015. Thanks to the increasing sale volumes of alternative energy vehicles in China, the price of battery grade lithium carbonate rose rapidly. In Oct. and Nov., the enterprises in China kept increasing the price. Till the middle of Dec., the quoted price went up to about USD16, 153/t, up in 50% month on month.
The third period is from the middle of Dec. in 2015 to now. Currently, the price has no sign to fall. Actually, the quoted price from some enterprises has gone up to USD23, 076/t, up in over 300% compared to the early in 2015.
LiPF6 is a core material to produce electrolyte, however, it is very difficult to produce LiPF6 in the technical level. The price was about USD13, 076/t in the early of 2015. Later, due to the limits of supply, the price kept rising. In the early of Dec, the quoted price was USD30, 769/t. Some current quoted price even went up to USD40, 000/t.
Electrolyte is the weakest material in the “price to rise” among four raw materials to produce lithium battery because the industry already stuck in overcapacity. Thus, electrolyte has very low profits for the enterprises.
The increasing price of LiPF6, one of electrolyte’s raw materials, has brought quite a lot pressure on electrolytes’ enterprises. There was news that some electrolyte companies had asked the downstream clients to raise the price of electrolyte in their orders.
Comparison on market response
Facing the rising price of lithium carbonate, the stock of Tianqi Lithium began to rise immediately. Till the end of Dec. 2015, the stock of Tianqi Lithium rose from USD7.69/share to USD26.15/share, with an increase of 250%. Followed by Jiangxi Ganfeng Lithium Co., Ltd, its stock increased from USD2.76/share to USD10.15/share, up almost 300%.
Till the end of Dec., the stock market of LiPF6 looks quite slow while the do-fluoride stock market “secretly” rushed to USD15.38/share from 2.61/share. The stock of China Tinci went all the way to USD14.6/share from USD6.15/share.
Comparison on the causes
The imbalance between the supply and demand of lithium carbonate is the main reason to cause its increasing price.
The downstream enterprises expanded their capacity successively in 2015. Also, due to the unknown changes of subsidy policy of alternative energy vehicle from the Chinese government (the Chinese government may cut down the subsidy), many enterprises seized to distribute their products to grasp the market share, which had led to the peak of the demand for raw materials.
Moreover, it was the winter shutdown of the salt lake and the delay in the production of newly-constructed lithium carbonate projects that resulted in no substantial increase in supply in the short run.
With the rapid demand of alternative energy vehicles, the price of lithium carbonate continued to grow. In the future, CCM believes that the enterprises of lithium carbonate will have great performance.
The increasing price of LiPF6 is also caused by the insufficient supply.
The expansion period of LiPF6 lasts for one and a half years. Although manufacturers of LiPF6 began to expand their capacity from Oct., with the long expansion period, the new capacity of LiPF6 is still very limited and the gap between supply and demand will keep enlarging. Thus, its price will keep rising which greatly benefits the manufacturers’ profits.
As for electrolyte, its high cost pushes its high price. Due to the rapid growth of its raw material and its weak bargaining ability in the downstream, the profits for the enterprises won’t increase too much even with the increasing price.
All in all, the irrational rising prices of lithium carbonate and LiPE6 are caused by the increasing demand and insufficient supply, which will be beneficial for the enterprises’ profits. With the long period of expansion, it is difficult to narrow the gap between demand and supply. Thus, lithium carbonate and LiPE6 will continue to be at high price.
However, the increasing price of electrolyte is not able to earn a lot of profits for the enterprises. We should not have much anticipation.
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