Graphitization 37 Questions I

Capacity

• 1. Graphitization capacity?

  At the end of last year, the domestic graphitization capacity was about 700000 tons, and 40% - 45% of the capacity was concentrated in the Inner Mongolia region. The INFORMATION of graphite electrodes used for EAF steelmaking. By the end of October this year, the nominal capacity of negative electrode graphitization was about 840000 tons. From the beginning of the year to now, 100000-150000 tons of new graphitization capacity can be invested. The subsequent planned capacity exceeds 700000 tons, and the construction cycle needs more than 2 years to be realized one after another. There are two main reasons for the long period:

• 1) The initial capacity scale may not be fully realized. For example, only 50000-100000 tons can be built for 200000 tons, and the remaining capacity needs to be found elsewhere, resulting in a longer cycle;

• 2) The cycle of getting the evaluation procedures is lengthened.  

   

• 2. Graphitization capacity pattern?

  From the perspective of outsourcing manufacturers, the relatively large scale: Ruisheng + Dasheng total 65000 tons, Sanxin has more than 30000 tons, Mengji 30000 tons, Xinjiang tianhongji silicon industry originally had 20000 tons, and now it is also expanding its production and is close to putting into operation. Next year, it will reach 60000 tons, Hebei Yuanshi Huaiyang: 30000 tons of complete OEM products, and other enterprise: Hengke, Hengsheng, Kaijin, snow and Xinyuan is almost each about 10000-20000 tons. The production capacity of Shanxi, Sichuan and Hebei is relatively small, each of which will not exceed 20000 tons, and the total production capacity of each region is about 100000 tons. There are 64 statistical samples, accounting for 90% - 95% of the whole industry, and about 5% - 10% are not counted. The number of enterprises with a capacity of 10000 tons is relatively concentrated, and there are about 30 enterprises with a scale of 10000 tons and below.  

   

• 3. Graphitization current and future capacity gap?

  There is a lot of graphitization capacity planning this year. By the end of this month, the released capacity has not exceeded 100000 tons. There has been a hard gap in negative graphitization in October. In October, the graphitization gap was about 8000 tons. There will be new capacity in the future, some of which have been completed but are difficult to put into operation because there is no power quota; In addition, in some places where graphitization is scattered, some new capacity is released, but the magnitude is relatively small, that is, the annual volume of 20000-50000 tons, which can not fundamentally alleviate the market tension. Before the second quarter of next year, it is foreseeable that there will be a very shortage, and the monthly gap may be about 20000 tons; It may ease in the third quarter, but it's a very tight situation for the whole of 2022. Next year, the negative electrode production scale will be more than 1 million tons, and the monthly output will be 100000 tons. In this way, the gap will be very obvious.  

   

  Price & cost

• 4. Graphitization price?

  The mainstream transaction price of the market at the lowest point in 2020 year is about 12,500 yuan. In October, the market transaction price center has reached 23,000-25,000 yuan, and the single order price has reached 26,000-27,000 yuan. The main reason is supply and demand. The rising range of negative electrode graphitization price is relatively more gentle, but the focus will continue to rise later. The serious shortage of graphitization will not change before the Winter Olympic Games. Shanxi and Hebei in accordance with previous practice in the winter heating season will also be affected.

   

• 5. Price negotiation strategy of negative electrode and graphitization enterprises?

  Negative electrode prices rose a wave in the second quarter. Some small factories raised prices around September, and large factories began to negotiate prices in October. According to the price negotiation cycle, the price will be negotiated for half a year in the fourth quarter, or enter the annual or quarterly negotiation period. In addition to the rise of negative electrode prices in 2017, it is actually a state of inertia decline of about 5% every year. Negative electrode enterprises and overseas customers basically sign three long-term orders, discuss the price every year, and talk about the annual contract. Domestic battery factories negotiate prices semi annually or quarterly, from September to October, and really rise from November to December. The price adjustment of smaller battery manufacturers will be more flexible. The price increase of negative electrode starts from medium and low-end products, because it faces relatively small cell manufacturers.  

   

• 6. Graphitization price space next year?

  The historical high in 2010 was about 30000 yuan, and it is highly probable that there will be new high of single orders this year and next year.

   

• 7. Industrial electricity price?

  The price of electricity in Inner Mongolia has increased since June and July, and is now more than 40 cents.The possibility of further increase cannot be ruled out. Other places have not heard of significant increases in electricity costs.

   

• 8. Crucible price and proportion in graphitization cost?

  The price range of crucible is 5000-8000 yuan, accounting for 10% - 15% of the graphitization cost. Each crucible is basically scrapped after 7-9 times.  

   

• 9.  The impact of graphitization price increase on the profitability of negative enterprises?

  In this round of negative electrode, including graphitization, the supply-demand pattern changes, so the voice of enterprises may change, and the voice and bargaining chip of the negative electrode enterprises may be larger, so the intensity of cost transmission in this round will be greater. The changes in graphitization prices in previous years were mostly digested by negative electrode enterprises themselves. Therefore, the increase of graphitization price does not weaken the profits of negative electrode enterprises, but manufacturers with high self distribution rate will make more profits. At present, the negative electrode can conduct 60% - 70% of the cost rise. In the future, if the capacity is further tight, 100% conduction is possible.  

  

  Double control and power limiting

  
  

• 10. Current power rationing?

  At the beginning of the 2021, the power was limited, and the negative graphitization manufacturers were limited by 15% - 30%. After July, the power limit in Inner Mongolia further increased, from 20% - 30% at the beginning of the year to 50% - 70% this month.  

   

• 11. When was the threshold for evaluation added?

  Energy assessment is a new approval condition this year, which was not available before. For projects already in production and put into operation, only the procedures for energy assessment need to be completed, but the approval process of new projects will be very difficult.  

   

• 12. What is the main process, responsible department and approval cycle of energy assessment?

  Originally, it was approved by the provincial Party committee. Later, due to the increase of double control, the energy consumption of more than 50000 tons of standard coal needs to be approved by the National Development and Reform Commission, and the approval period is not particularly clear. Progress may accelerate after the project enters the normal approval process after the second quarter of next year. Note: Coal consumption for 1 KWH of electricity is 320g, energy consumption for 50,000 tons of standard coal is nearly 160 million KWH of electricity, corresponding to nearly 13,000 tons of graphitization project.

   

• 13. What are the reasons for the prominent contradiction in power consumption this year?

  It is mainly driven by the demand side. Its strong demand leads to high power consumption. The growth rate of power consumption in the first half of the year has increased significantly compared with 2019. It's been another off-year for hydropower, with hydropower generation down year on year and thermal power up 13%, leading to increased carbon emissions and a surge in upstream coal use. On the supply side, coal was controlled and constrained by the state in the past, and production capacity was not considered enough to match the growth of demand.

   

• 14. The situation of power rationing and energy consumption control in Inner Mongolia?

  Inner Mongolia is currently a double green light, and the double control performance is still good. In the past, the double control performance of Inner Mongolia was not very good during the 13th Five Year Plan period, but it was carefully and comprehensively considered from the beginning of the 14th Five Year Plan period. Power rationing in Inner Mongolia is not due to insufficient power, and there is still surplus in strength constraints. Energy shortage is not the main reason. It is mainly due to the orderly regulation and control of policies in Inner Mongolia.  

   

• 15. Will the control attitude towards graphitization change? Graphitization is a high energy consuming industry.

  The major contradiction between Yunnan and Sichuan lies in that a large number of high energy consuming industries will gather in the future, and the state will certainly control and restrict them. Some industries seem to consume high energy, but they are caused by established policies. For example, the demand for new energy drives industrial silicon, and the demand for batteries drives graphitization. The state will adjust major matters and does not rule out the liberalization of special high energy consuming industries.  

   

• 16. Views on energy storage?

  There are two main energy storage methods. One is pumped storage. At present, 32GW accounts for 90%, the remaining 3GW is electrochemical energy storage, and lithium iron phosphate accounts for 90%. The state hopes that electrochemical energy storage, as a new energy storage method, will get the participation of capital. At the same time, it also gives a very clear peak valley price difference. Therefore, electrochemical energy storage can better match distributed energy sources, including wind power, photovoltaic and distributed charging piles. Electrochemical energy storage pays more attention to the ability of short-period peak shaving and frequency modulation, and is configured forcibly according to 2-4 hours; Pumped storage pays more attention to long cycle.  

   

• 17. How much will the Winter Olympics affect the shutdown and power rationing of surrounding cities?

  These are standard actions. We can refer to the past and there will be no significant adjustment, but the point that may be alleviated slightly lies in the trend of domestic high energy consumption prices. Now there is no way to draw a one size fits all conclusion. If the price of raw materials goes down at that time, the control constraints may continue to be strong; If the price is still high and the upstream raw materials are also tight, then there may be some overall considerations.  

   

• 18. In the future, energy consumption double control and power rationing will rely more on the carbon trading market. How to combine the quota and division of total energy consumption with the carbon market?
  After being incorporated into the carbon market, the state can clarify the total carbon emissions of the industry and give a constraint. Carbon emissions and energy consumption are directly linked, which determines the total energy consumption to a certain extent, and then allocated to each enterprise. If it exceeds the red line, it needs to buy electricity at a high price. Such constraints are given to the provincial government. The provincial government will reasonably plan the use of energy on the basis of such needs, and there will be no such situation as loose in the front and tight in the back this year. Including the future early warning mechanism and elastic mechanism, it will form a deep integration in the carbon trading market. The carbon trading market has been settled in two places, including Shanghai and Hubei. As the foothold of carbon trading, it has been incorporated into thermal power, steel, building materials and other industries.

  
  

• 19. Ulanqab's latest policy trends?

  The graphitization production line may be shut down during the Olympic Games from February to March. Now the policy has not been finalized and the opinions of enterprises need to be consulted. The production restriction ratio of enterprises in Ulanqab may be more than 60%. At present, all graphitization projects are no longer approved and reported. This situation is expected to continue until the second half of next year.  

   

• 20. Current production capacity progress in Sichuan?
  The progress of the local project in Sichuan has not been put into production in the third or fourth quarter of 22 as expected by the large negative electrode factory, as most manufacturers have not received the energy consumption index. Other graphitized sites, such as Guizhou and Xinjiang, require a long approval period for new projects unless they are already in production, to get more related news from us.