Graphitization gap expands negative electrode material supply continues to be tight  

Since the fourth quarter of last year, the domestic negative material graphitization market has shown a tense momentum. Get the high quality graphite electrode products. The leading manufacturers took the lead in locking production capacity in the market, and then the price began to rise. Up to now, the domestic graphitization OEM price has increased by about 70%. The main reasons for the continuous rise of graphitization OEM prices in this round are as follows:

1. The lithium battery market continued to improve, with the installed power battery increasing by 200% year-on-year in the first half of the year

In June 2021, China's power battery loading volume totaled 11.1gwh, up 136.2% year on year. The loading capacity of ternary battery and lithium iron phosphate battery was 5.9GWh and 5.1GWh respectively, up 98.3% and 206.4% year-on-year respectively. From January to June, China's power battery loading volume totaled 52.5GWh, up 200.3% year-on-year. In 2021, not only the domestic power battery market is booming, but also the overseas power battery demand market is not weak. It is predicted that the output of new energy vehicles in Europe alone is expected to exceed 2.3 million this year, and the global sales of new energy vehicles is expected to reach 5.8 million.

2. In the first half of 2021, the production of lithium negative electrode increased by 138.5% year-on-year

According to statistics, from January to June 2021, the output of 17 domestic lithium negative electrode materials enterprises was 308,900 tons, a year-on-year increase of 138%. From January to June the year-on-year change in output can also be clearly seen every month has more than double the growth. The large increase in negative electrode output means that the demand for graphitization foundry is increasing simultaneously.

3. The new capacity of negative electrode pole graphitization is limited, and the construction period of the project is long

According to statistics, the domestic negative electrode graphitization capacity in 2020 is 695,000 tons. Due to the periodic excess of the negative electrode graphitization capacity in the previous two years and the low price, the increase of negative electrode graphitization capacity in 2020 can be almost ignored. In 2020, not only will little new capacity be released, but the expansion plans have only started to roll out since around the end of the year. In addition, the negative electrode graphitization project belongs to a high energy consuming industry, with a long approval cycle and a relatively long construction cycle. Therefore, in 2021, the domestic negative electrode graphitization production capacity is in a white hot state. The history of large factories purchasing graphitization agent factories repeats itself, and those who get graphitization production capacity get the negative electrode market share.

4. Frequent power supply rationing in Inner Mongolia, where graphitization is concentrated, worsens the situation

The domestic graphitization foundry of lithium negative materials is mainly concentrated in Inner Mongolia, Sichuan, Shanxi, Yunnan and other places, and Inner Mongolia is the main gathering place. According to statistics, 46% of the domestic negative graphitization capacity in 2020 is concentrated in Inner Mongolia. However, under the dual-control policy of energy consumption in Inner Mongolia, negative electrode graphitization OEM enterprises, as a large energy consumer, have become the object of "care". Since this year, especially around April, the power supply of some of the graphitization foundry factories has decreased by 15-30%. The situation improved slightly in May and June, but tightened again in July, the graphitization power supply in Ulanqab area decreased again, and the graphitized foundry capacity was reduced by about 10%. According to our recent visit to Ulanqab, some graphitization factories in the region have irregular power outages twice a day, 5 hours a time.

From the above, we can see that the supply and demand of negative electrode graphitization OEM obviously do not match, and the price naturally rises. Up to now, the mainstream price of domestic negative electrode graphitization OEM has been reported as 18,000-22,000 yuan/ton, and some zero single prices have been at 23,000 yuan/ton, up about 70%. At present,  the sharp rise of graphitization OEM price has put pressure on the negative electrode manufacturers and began to negotiate price increase with the client one after another.

At present, many graphitization expansion projects are under planning or have been actively promoted. However, from the perspective of this year, it is difficult to put in a large amount of capacity in the second half of the year to alleviate the current supply gap. The release of capacity with a certain scale is expected to start next year. It is predicted that the domestic negative electrode output will exceed 700,000 tons in 2021 and will exceed the production mark of one million tons next year. Therefore, it is expected that the graphitization price will not fall significantly in the first three quarters of next year, to read more technical news contact us.