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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
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:
Source: CCM
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
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
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.
Source: CCM
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.
If you need more
information about lithium carbonate, LiPF6 and electrolyte in China, why not
get a free-trial of CCM’s
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About CCM:
CCM
is the leading market intelligence provider for China’s agriculture, chemicals,
food & ingredients and life science markets. Founded in 2001, CCM offers a
range of data and content solutions, from price and trade data to industry
newsletters and customized market research reports. Our clients include
Monsanto, DuPont, Shell, Bayer, and Syngenta. CCM is a brand of Kcomber Inc.
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