CCM: LiPF6 industry in China may face overcapacity in 2017
12 July 2016
Soaring prices for and profits from LiPF6—lithium hexafluorophosphate, the dominant Li-salt used in electrolytes in commercial rechargeable lithium-ion batteries (LIBs) based on a graphite anode and a 3–4 V cathode material—has encouraged enterprises in China to expand LiPF6 production while also attracting new players. However, according to market analyst firm CCM, based on the current planned capacity expansions, the LiPF6 industry may face overcapacity in 2017.
In a Li-ion battery electrolyte, LiPF6 is combined with an organic solvent and additives. The resulting electrolytes allow for both high energy densities and appreciable power densities, providing a medium to transfer charge between the electrodes via the Li+ cations and the counter-anions.
Due to the surge in production and sales of alternative energy vehicles in China, the price of LiPF6 has reached more than $60,000/t—up 500% up compared to that in Oct. 2015, according to CCM. The stock prices of related A-share listed enterprises rose as well, including Guangzhou Tinci Materials Technology Co., Ltd. (Tinci) and Do-Fluoride Chemicals Co., Ltd. (Do-Fluoride Chemicals).
The stock price of Do-Fluoride Chemicals was up 327.33% during the period from 1 September 2015 to 6 May 2016. As for Tinci, its stock prices went up 339.58% during the periods from 1 September 2015 to 12 May 2016.
Stimulated by the soaring stock prices, related listed enterprises put forward plans on expanding or launching new LiPF6 production.
According to information disclosed by Do-Fluoride Chemicals, its current LiPF6 capacity is 3,000 t/a. The company plans to launch and complete a new 3,000t/a liPF6 project in 2017, resulting in Do-Fluoride Chemicals LiPF6 capacity of 6,000t/a in 2017.
As for Tinci, its LiPF6 capacity reached 2,000 t/a in 2015. At the end of 2015, Tinci announced plans to expand its production. Its new 6,000 t/a liquid LiPF6 project (2,000 t/a solid LiPF6) is expected to be completed and put into production at the end of 2016. Its 2,000 t/a solid LiPF6 project would also be put into production in the middle of 2017 and by that time, the total capacity of LiPF6 of Tinci would reach more than 6,000 t/a.
JiangSu Bicon Pharmaceutical Listed Company (Bicon) has a current LiPF6 capacity of 2,000 t/a; a new LiPF6 project will add 3,000 t/a at the end of 2016, resulting in total LiPF6 capacity of 5,000 t/a.
According to Shandong Shida Shenghua Chemical Group Co., Ltd. (Shida Shenghua)’s announcement in Dec. 2015, Shida Shenghua plans to construct a 1,000 t/a LiPF6 project. In 2017, depending on the market, Shida Shenghua may also begin its 4,000 t/a project.
Earlier this month, Zhejiang Yongtai Technology Co., Ltd. (Yongtai), stated that its subsidiary would invest in constructing a 6,000 t/a LiPF6 project. The stage I of the project, with the constructing period of 1.5 years, would provide Yongtai with the LiPF6 capacity of 3,000 t/a.
Even if the planned LiPF6 capacity of Yongtai is excluded, the total LiPF6 capacity of four listed enterprises, including Do-Fluoride Chemicals, Tinci, Bicon and Shida Shenghua, would reach 18,000 t/a by 2017. China Merchants Securities Co., Ltd., a company providing securities investment and financing, predicts that the demand for LiPF6 would be about 20,000 tonnes in 2017.
Based on the current capacity and the market of LiPF6, the board secretary of Do-Fluoride Chemicals stated that the demand and supply of LiPF6 would be affected by the downstream market and expanded LiPF6 production.
When asked about whether overcapacity of LiPF6 would occur, Tinci also emphasized the new demand in 2017. The company says that overcapacity would mainly depend on whether there are new orders from the downstream market. Tinci would have to deal with LiPF6 orders with or without capacity expansion.
It is believed that the overcapacity of LiPF6 would occur in 2017 considering that related listed companies expand LiPF6 production and construct new LiPF6 projects. In addition, some other manufacturers have their own capacity and may even import LiPF6 from overseas.
If the supply of LiPF6 is less intense in 2017, the sales price would decrease in some way, which is not good news for the listed enterprises of LiPF6. However, the falling price of LiPF6 would be beneficial to the downstream li-ion battery and the whole alternative energy vehicles. It would help reduce the cost for the vehicle manufacturers and with more supply, it is easier for them to purchase the raw material.
—Stanley Wang, chief editor of China Li-ion Battery News, CCM
CCM provides market intelligence for China’s agriculture, chemicals, food & ingredients and life science markets. Founded in 2001, CCM offers a range of data and content solutions, from price and trade data to industry newsletters and customized market research reports. Clients include Monsanto, DuPont, Shell, Bayer, and Syngenta.
Lithium batteries over production capacity in 2017/2018 is good news for future electrified vehicles buyers because it may pressure manufacturers to either lower their prices or improve their batteries to maintain their market.
Posted by: HarveyD | 12 July 2016 at 02:20 PM