Insufficient graphitization capacity - Q4 lithium electric material will focus on the negative electrode

This year the whole lithium electric material market can be described as "When you've sung your part, I take the stage". It has appeared in the spotlight one after another, including lithium carbonate, lithium iron phosphate, VC, lithium hexafluorophosphate and PVDF. The supply is tight and the price has soared. To get the high quality graphite blocks here.

Lithium cathode materials are much more peaceful, although petroleum coke has increased by more than 200% since last year; The price of needle coke has also increased by more than 50%; Graphitization increased by more than 77%. However, as of Q3, the price of domestic negative electrode materials has been basically stable for overseas customers. In China, it has generally increased by about 8% in Q2. The price of medium and low-end negative electrode materials in Q3 has increased slightly again. So far, the overall increase in the price of negative electrode materials this year is about 10%, which is far from covering the increase in cost.

From the current direct cost composition of negative electrode materials, the proportion of graphitization cost has increased from more than 40% in the previous year to about 55% at present, and the cost proportion has increased by about 10%. At present, for every 10,000 yuan/ton increase in the graphitization cost of negative electrode materials, the cost of negative electrode materials will increase by 13,000 yuan/ton.

Figure: current direct proportion of negative electrode material cost

The rise of graphitization price is not the most helpless, but the lack of production capacity is the most helpless. According to statistics, by September 2021, the graphitization capacity of domestic negative electrode materials was 820,000 tons, an increase of only 120,000 tons compared with the beginning of the year. Under the influence of double control of energy consumption, it was difficult to approve the negative electrode graphitization project, resulting in the delay in putting a large number of new production capacity into the market. However, the output of negative electrode materials increased by 115% year-on-year.

At present, only 17 sample negative electrode material enterprises have an output of more than 60,000 tons, but the monthly theoretical capacity of graphitization is only 68,000 tons. Combined with the influence of power restriction, environmental protection and other policies in Inner Mongolia, Sichuan and Yunnan, the gap is clearly in front of us.

Figure:  Statistics of graphitization capacity distribution of domestic negative electrode materials in August 2021

Overall, nearly 40% of the domestic negative pole graphitization capacity is concentrated in Inner Mongolia. The overall power restriction in September will affect the graphitization capacity by more than 30%, and the impact range is expected to exceed 50% in October. Coupled with the power restriction in Yunnan and Sichuan, as well as the impact of environmental protection and power restriction in other regions, the graphitization capacity has become the sword of Damocles hanging over the heads of the negative pole factory purchasers.

For Q4, with the coming of heating season, Winter Olympics and so on, the negative graphitization market is expected to be worse, it is difficult to improve. At present, the demand for power batteries is still growing, and the demand for negative materials will also increase synchronously. The dislocation pace of supply and demand will push the negative materials from the previous abundant supply to the state of tight supply.

It is expected that Q4 negative electrode material manufacturers and battery factory price bargaining chip will be more weight, because the pressure brought by the cost will also be effectively transmitted to the downstream, sharing the same trials and hardships together. The negative electrode price is expected to rise by about 10% , to contact us for the detailed graphite news.