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Summary of lithium battery anode industry chain market situation

In 2019, the domestic lithium battery anode material output was 357,500 tons, with year-on-year increase of 38.87%; the sales volume was 331,000 tons, continuing growth momentum of the previous year.

Beginning in 2020, with non-declining domestic subsidy policy, the overseas market is going to usher an inflection point, and the Tesla Shanghai factory has been completed and put into operation, and many other pushes have made the entire lithium battery market optimistic. However, after the epidemic spread in Wuhan, all industries and field were affected in different extent, lithium battery negative electrode industry can’t get out of it.

1 Start date generally delayed

Before the Spring Festival holiday, some enterprises were originally scheduled to start on 31st Jan, but in fact, the shift basically starts on February 10th. Now the production is mainly reply on employees who were on duty during the Spring Festival holiday. Other employees shall stay at home to be isolated for 7 days, and they can’t go outside if they just came from other province until 14day later. It means that manufacturers of anode materials can basically resume normal production in March.

Table 1: Production statistics of some anode material manufacturers

Company name Production status Notice
BTR Normal production Reduced operating rate
Shanghai Shanshan Production stops in some factories The Shanghai factory started on the 10th, and Ningbo, Huzhou, Ningde, Inner Mongolia, and Luzhou all started during the holidays.
Putailai Production in some factories Keep normal production in Liangyang plant
Kaijin Production in some factories Keep normal production in Inner Mongolia and Qinghai factories
Fujian Xiangfenghua Go to work on February 10 Normal production is expected to resume after 14 days
Shinzoom Go to work on February 10 Main manufacturing department started
Suntech Not working Specific start date to be determined
Jiangxi Zhengtuo Go to work on February 10 Partially started
Shenzhen Radford Go to work on February 10 Partially started

2 Graphite production start

According to a survey by Xinyi Information, graphitization manufacturers in Inner Mongolia started to work on February 3rd, but since November 2019, the power battery market declined again, the inventory of graphitization manufacturers is basically clean before the Spring Festival. The unsmooth logistics caused by the epidemic situation makes all graphitization manufacturers fall into an awkward situation of insufficiency. Logistics is currently the biggest problem. Not only difficulty to find trucks, but the price has generally risen by 20-40%, which reduced the marginal profit again.

1.January Carbon market focus

Epidemics drags market demand, negative production and sales of anode materials!

Electric furnace steel companies have insufficient stocks, price of domestic small-size graphite electrodes raised with tight supply!

Enterprise inventory is low, and domestic needle coke market is generally bullish.

  1. Comprehensive evaluation of the industrial chain

The overall carbon market was weak in January. During the Spring Festival holiday, a sudden outbreak occurred, with lower operation rate of domestic anode material companies, overall production and sales were at a low level. The domestic graphite electrode and downstream electric furnace steel operating rates are now declining, and the market is in a deadlock. The effective inventory is not high, but the market outlook of enterprises is generally bullish.

  1. Market analysis and forecast of major products
Product News during this month
Needle coke The overall price of the needle coke market was stable in January, and shipments were not well affected

by the Spring Festival and sudden outbreaks;

The overall price of the needle coke market was stable in January, and shipments were not well affected by the Spring Festival and sudden outbreaks;
Petroleum coke In January, the petroleum coke market was generally stable and the market price was stable;
In the short term, the market price fluctuates and hard to estimate, it is better to look on.
Coal bitumen In January, the coal bitumen market continued to move steadily, with market prices stable;
The majority of domestic manufacturer have resumed work on February 3, based on the orders received before Chinese New Year.

New orders still need to see the development of the epidemic.

In January, the supply of small-size ultra-high graphite electrodes was tight, and prices continued to rise steadily, while the prices of high-power products also rose;
Graphite With the spread of the epidemic, the operating rate of domestic graphite electrode manufacturers has dropped to about 30%.
The logistics cost of new export orders is higher, and the delivery cycle is extended, generally from 2 weeks to 1 month.
Electric furnace

steel

In January, domestic steel prices fell sharply, and electric furnace steel companies' profits continued to decline;
The utilization rate of electric furnace steel production capacity has further decreased to about 16%.

In the face of epidemic prevention and control and the pressure of scrap steel, some electric furnace steel plants

have announced the postponement to resume production in the second half of February.

Cathode material The transaction situation of the negative electrode material market in January was obviously not as good as in previous years.

It is expected that the production and sales of the negative electrode material market in February will also be low;

In January, the domestic graphitization market was light, and most manufacturers delayed the start.
Nodular graphite Due to the impact of the Spring Festival holiday and sudden outbreak in January, the overall production of

domestic nodular graphite declined significantly;

In the beginning of January, almost all domestic natural graphite companies stopped work, and

only 2 companies did not stop work during the Spring Festival.

Market review 2019

The shipment volume of the anode materials market maintained a steady growth in 2019, mainly due to:

1) Driven by the growth of the power battery terminal market, the shipment volume of the power battery market in 2019 is 71GWh, an increase of 9.4% year-on-year, which will further increase the shipment of the anode material market;

2) The market has further increased the application of high-rate and fast-charge products, which has led to the rapid growth of artificial graphite shipments;

3) The export volume of enterprises represented by BTR, Putailai, and Ningbo Shanshan continued to increase. Among them, driven by the increase in shipments of LG and Panasonic power batteries, the export volume of Shanshan and BTR increased significantly;

4) The domestic small power and telecommunications energy storage market exploded, driving lithium battery shipments to increase, which in turn boosted anode shipments.

The lithium battery anode material market will still maintain rapid growth in 2020. The main reasons are as follows:

1) Driven by new energy vehicle terminals, it is estimated that China's annual output of electric vehicles will exceed 1.8 million in 2020, which will drive the growth rate of demand for power batteries to exceed 40%, and then drive rapid growth of anode materials;

2) Overseas power battery companies such as LG, Panasonic, and SKI have accelerated their capacity releases, increasing demand for anodes, which is expected to further increase the scale of domestic export of anode materials;

3) Fast-charging and rate-type batteries will still be an important market development direction. The proportion of artificial graphite anode materials is expected to exceed 80%, driving the overall growth of the anode material market.

The anode material market as a whole will still maintain rapid growth, but the output value will increase slowly. Under pressure from industry capital chain, and the gross profit margin will remain low. The negative electrode market in 2020 is expected to have the following characteristics:

1) The self-built graphitization plants of the leading companies and the release of graphitization capacity have further accelerated, and energy saving, and consumption reduction have become the first choice for graphitization bases;

2) Bind between major customers and leading enterprises has been further deepened, and the layout of second-line echelon anode material companies abroad has accelerated;

3) The needle coke market is affected by the release of production capacity, and the price is expected to be further reduced by more than 10%. With the release of graphitization capacity and the effect of scale, the price of graphitization processing is expected to fall to 1-11 thousand RMB / ton, and the price of artificial graphite materials It will still maintain a decline of 2% -5%.

In three years, competition in the anode materials market will further intensify, and low-end duplicated production capacity will be eliminated. Only companies with core technologies and advantageous customer channels can achieve significant development, and market concentration will further increase. In other words, operating pressure is increasing.

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