lithium battery From mid-2015 to mid-2016, lithium batteries have come out of a wave of strong periods. Star stocks such as Tian Qi Lithium, Fluoride, and Neo-Choubang still keep many investors fresh in their memory. That wave of market is mainly due to the surge in the production and sales of new energy vehicles, especially passenger cars. Is the logic of this rise still the same?
It should be noted that there is no market for BYD produced by new energy vehicles and lithium batteries, and Guoxuan Hi-Tech, an important power battery manufacturer in the country, has no market, indicating that this wave of market may not be related to the growth of demand for new energy passenger cars in the downstream.
In my opinion, the rising prices of lithium and cobalt in the upstream materials are the biggest drivers of this wave. In the first half of the year, the performance of many upstream raw material companies, coupled with rising prices of lithium carbonate and cobalt, led to a surge in the share price of Sanyuan's cathode materials companies and upstream resource companies, and boosted the concept of other lithium batteries.
For instance, the recent surge in Nissan Lithium and Tianqi Lithium is a lithium-mineral production company, and Huayou Cobalt and the new cold Hanrui Cobalt industry are producing cobalt metal. This wave is not so much the lithium battery market, as lithium-cobalt materials company-led price increases.
Price increases
The lithium battery is mainly composed of a positive electrode material, a negative electrode material, a separator, and an electrolyte. Among them, the positive electrode material has the highest proportion of the total cost, and generally reaches about 40%.
Lithium carbonate is an important raw material for the production of cathode materials, according to industry sources, due to many domestic lithium carbonate manufacturers limited production due to environmental protection, resulting in limited supply of lithium carbonate. At the same time, domestic cathode materials and battery plant orders are sufficient, output is still high, demand for lithium carbonate is strong, prices continue to rise.
The data shows that the industrial grade lithium carbonate offered 121,000 yuan/ton at the beginning of this year, and the battery grade lithium carbonate offered 136,000 yuan/ton. The recent industrial grade lithium carbonate offers 142,500 tons/ton, and the battery grade lithium carbonate offers 160,500 tons/ton.
The continuous rise in prices has made the performance of the industry's companies outstanding. Take the recent celebrity stock Li Feng as an example. According to the 2016 annual report, the company's revenue and net profit increased by 110.06% and 270.74% respectively year-on-year.
In the first half of the year, the performance of the Lifan lithium industry continued to soar, with revenue of 1.625 billion yuan, a year-on-year increase of 20.98%, and a net profit of 607 million yuan, a year-on-year increase of 118.22%. In the case of a slowdown in revenue, net profit has continued to rise, indicating to some extent that the company has a dominant position in product pricing.
Cobalt metal is mainly used for ternary materials, which has to mention three main technical routes of lithium iron phosphate, lithium titanate and ternary materials. Lithium iron phosphate is the most widely used at this stage, with low price but high safety but energy. High density means that the manufacturer is BYD. The ternary material has a high energy density, but it is technically difficult and is rapidly developing. The representative manufacturer is a new era of Ningde. Lithium titanate has the smallest energy density, and almost only the silver dragon led by Dong Mingzhu is developing.
According to industry insiders, the ternary material with the highest energy density is the direction of future development. Previously, due to the safety of the three-element lithium battery, it was forbidden to use it on new energy buses. With the rapid growth in sales of new energy vehicles (cars), the superiority of ternary materials has gradually emerged, which has led to an increase in the price of cobalt metal.
By the end of June this year, cobalt metal prices have almost doubled compared to the beginning of the year. Benefited from this, the raw materials companies in the upstream of the power battery have achieved remarkable results in the first half of the year.
Taking Huayou Cobalt as its representative, the company’s net profit for the first half of the year was nearly 675 million yuan, an increase of 2257% year-on-year. Cobalt products account for about 73% of total sales revenue.
How to go in the future
It is also expected that the upstream raw material companies will have a good performance in the first half of the year, coupled with continued rising prices of lithium carbonate and cobalt, and they will continue to be favored by the market.
Fluctuations along with fluctuations in prices are characteristics of cyclical stocks. The concept of lithium batteries is similar to the supply-side price increase concept. Fangda Carbon is calm after a period of red burst, and the lithium-cobalt concept may be the same.
For lithium ore companies, whether they are ternary batteries or iron-lithium batteries, are inseparable from lithium resources, and more attention is paid to the supply of lithium ore. For ternary materials companies, as they are mainly used for new energy vehicles, they are not widely used in energy storage and new energy buses. The future still depends on the development of new energy vehicles.
It should be noted that the concept of this lithium battery does not benefit all industrial chains, and companies involved in the new energy bus industry chain are not very good.
This is because this year's market performance of new energy vehicles (cars) and passenger cars differs day by day. According to statistics, from January to July 2017, the production and sales of pure electric vehicles completed 223,000 units and 204,000 units respectively, an increase of 37.8% over the same period last year. 33.6%.
On the contrary, the new energy bus market has continued to slump this year. From January to June, the total number of new energy bus passenger cars in China was 17,952 units, a decrease of 47% compared to the first half of last year.
According to the above, new energy vehicles (sedans) use ternary batteries widely, and new energy buses still use iron-lithium batteries. As a result, the ternary battery industry chain continues to benefit, while the iron-lithium battery industry chain companies have not The transformation of ternary materials may not be optimistic.
Sanyuan Battery's leading Ningde era has not been listed yet, and it has been widely sought after. In March of this year, the subsidiary of Hon Hai Group invested RMB 1 billion, and gained only 1.19% of the shares in Ningde Times, with a valuation of RMB 84 billion.
It seems that the two major manufacturers of iron and lithium batteries, Guoxuan Hi-Tech and BYD, have already recognized the seriousness of the problem. Recently, the two companies formed a joint venture with China Metallurgical Group to produce ternary cathode materials to counter the Ningde era.
In the long run, new energy vehicles are still the future development direction, and there is more room for growth. In the short term, it is related to the price trend of upstream raw materials. In addition, due to the sluggish new energy bus market, the iron-lithium battery industry chain companies will be in the short-term. The participation may not be high.
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