【Negative electrode materials】Transition is blocked, negative material overcapacity

With the popularity of new energy vehicles, the demand for lithium batteries is also increasing. Graphite negative materials and graphite electrode materials are highly similar, and raw material competition between the two is inevitable. The price and industry profit of negative electrode materials are much higher than that of graphite electrode, leading to the negative electrode material manufacturers in the process of competing for raw material resources, and constantly pushing up the price of petroleum coke, needle coke and other raw materials. 

Due to the high profit and low transformation difficulty of the negative electrode material industry, some graphite electrode manufacturers have taken graphite negative electrode materials as an important breakthrough direction for enterprise transformation. Xijiang, Chairman of Fangda Carbon (600516). SH) Co., Ltd. has stated that graphite anodes and graphite electrodes can be described as "homologous.". The raw materials are the same, and the carbonization and graphitization process equipment are similar, but there are slight differences in the amount of raw materials added, processing accuracy, and other aspects. The adjustment at the production end is relatively flexible.

The short-term contradiction between supply and demand of negative electrode materials and the optimistic prediction of the downstream new energy market have led some graphite electrode manufacturers to step into product transformation. Listed companies alone include Lomon Billions (002601. SZ), Fangda Carbon, and other companies that enter the negative electrode material market through their own or their subsidiaries' graphite electrode companies. In addition, Sunstone Development (603612. SH) also announced its entry into the negative electrode material industry with the advantage of centralized procurement of petroleum coke and global procurement of raw materials.

With the expansion of the industrial chain of graphite electrode manufacturers and petroleum coke manufacturers, as well as the expansion of negative material manufacturers themselves, negative material shipments have increased significantly. According to Sun Qing, in 2021 negative electrode materials shipment volume was 779,000 tons, an increase of 86% compared to 2020. China's shipments account for nearly 90% of the global total, and will continue to maintain a high growth rate in 2022. The shipment volume was 1.35 million tons, an increase of 90% compared to the same period last year, with artificial negative electrode taking the lead.

The pattern of market supply and demand has changed significantly accordingly. Sun Qing said, "The rapid growth of production capacity directly affects the supply and demand structure. The economic benefits of negative electrode material production enterprises and OEM processing enterprises have significantly decreased."

Zhou Xiangyang, professor of Central South University, said at the meeting that the current processing costs for graphitization have plummeted, with some newly entered enterprises competing for orders at low prices close to cost, and some enterprises suffering losses. Lithium ion battery negative electrode manufacturers urgently need to reduce costs and improve efficiency.

Sun Yi, Deputy Chief Engineer of China Aluminum Shenyang Aluminum Magnesium Design and Research Institute, told the Associated Press that it is not recommended that carbon industry enterprises blindly convert to negative electrode materials. As a link in the automotive industry chain, it takes a long time for negative electrode materials to enter the supply chain of mainstream automotive enterprises, which is not suitable for carbon enterprises in terms of time. Contact us to learn more about carbon market news.