The negative electrode material industry is welcoming a new market change.
Benefiting from the growth of China’s power battery market demand, China’s anode material shipments and output value increased in 2018, driving the growth of anode materials companies.
However, affected by subsidies, market competition, rising raw material prices and falling product prices, the market concentration of anode materials has further increased, and the polarization of the industry has entered a new stage.
At present, as the industry enters the stage of “reducing cost and increasing quality”, high-end natural graphite and artificial graphite products can accelerate the replacement of low-end anode materials, which makes the market competition of anode materials industry upgrade.
From a horizontal perspective, the current negative electrode materials companies or listed companies or independent IPOs are looking for a backing to obtain capital support, helping companies expand production capacity and develop new products. The development of small and medium-sized anode companies that do not have competitive advantages in product quality and technology as well as in the customer base will become increasingly difficult.
From a vertical perspective, in order to improve quality and reduce costs, negative electrode materials companies have expanded their production capacity and extended to the upstream graphitization processing industry, reducing costs through capacity expansion and manufacturing process enhancement, and further enhancing their competitiveness.
Undoubtedly, mergers and acquisitions and resource integration between industries and the extension of self-built graphitization processing industry will undoubtedly reduce market participants, accelerate the elimination of the weak, and gradually disintegrate the “three major and small” competition patterns formed by negative materials. The competitive ranking of the plastic anode market.
Competing for layout of graphitization
At present, the competition in the domestic anode material industry is still very fierce. There is a competition between the first-tier echelon companies to seize the leading position. There are also second-tier echelons actively expanding their strengths. You chase after each other to narrow the competition with the first-line enterprises. Some of the potential pressures of new competitors.
Driven by the market demand for power batteries, the proportion of artificial graphite market continues to increase to provide demand for the expansion of capacity of anode enterprises.
Since 2018, domestic large-scale investment projects for anode materials have been successively put into operation, and the scale of individual production capacity has reached 50,000 tons or even 100,000 tons per year, mainly based on artificial graphite projects.
Among them, the first-tier echelon companies further consolidate their market position and reduce costs by expanding their production capacity. The second-tier echelon companies are moving closer to the first-line echelon through capacity expansion, but lack sufficient financial support and lack of competitiveness in new products and technologies.
First- and second-tier echelon companies, including Beitray, Shanshan Technology, Jiangxi Zijing, Kaijin Energy, Xiangfenghua, Shenzhen Snow, and Jiangxi Zhengtuo, as well as new entrants, have expanded their production capacity as an entry point to enhance their competitiveness. The capacity building base is mainly concentrated in Inner Mongolia or the Northwest.
Graphitization accounts for about 50% of the cost of the anode material, usually in the form of subcontracting. In order to further reduce manufacturing costs and improve product profitability, anode materials companies have built their own graphitization processing as a strategic layout to enhance their competitiveness.
In Inner Mongolia, with its abundant resources and low electricity price of 0.36 yuan / KWh (minimum to 0.26 yuan / KWh), it has become the site of choice for the graphite plant of the negative electrode enterprise. Including Shanshan, Jiangxi Zijing, Shenzhen Snow, Dongguan Kaijin, Xinxin New Materials, Guangrui New Energy, etc., all have graphitization capacity in Inner Mongolia.
The new production capacity will be released from 2018. It is expected that the production capacity of graphitization in Inner Mongolia will be released in 2019, and the graphitization processing fee will fall back.
On August 3, the world’s largest lithium battery anode material base – Shanshan Technology’s annual production of 100,000 tons of anode material Baotou integrated base project was officially put into operation in Qingshan District, Baotou City.
It is understood that Shanshan Technology has an annual investment of 3.8 billion yuan in the 100,000-ton anode material integrated base for anode materials. After the project is completed and put into production, it can produce 60,000 tons of graphite anode materials and 40,000 tons of carbon-coated graphite anode materials. Annual production capacity of 50,000 tons of graphitization processing.
According to research data from the Institute of Advanced Research and Development of Lithium Power Research (GGII), the total shipment of lithium battery anode materials in China reached 192,000 tons in 2018, a year-on-year increase of 31.2%. Among them, Shanshan Technology’s anode material shipments ranked second in the industry, and artificial graphite shipments ranked first.
“We are 100,000 tons of production this year. By next year and the following year, we will expand production capacity more quickly, and we will quickly grasp the pricing power of the industry with scale and cost performance.” Zheng Yonggang, Chairman of Shanshan Holdings Board of Directors said.
Obviously, Shanshan’s strategy is to reduce production costs through capacity expansion, and thus dominate the product bargaining, and form a strong market impact on other negative electrode materials companies, thereby enhancing and consolidating its market share. In order to not be completely passive, the other negative electrode companies naturally have to join the capacity expansion team, but most of them are low-end production capacity.
It is worth noting that although the anode material companies are expanding their production capacity, as the performance requirements of power battery products continue to increase, higher requirements are placed on the product performance of the anode materials. The high-end natural graphite and artificial graphite products accelerate the replacement of low-end anode materials, which means that a large number of small and medium-sized anode enterprises can not be met by the demand for high-end batteries.
Market concentration is further enhanced
As with the power battery market, the concentration of the anode material market is further increasing, with a few head companies occupying a major market share.
GGII statistics show that in 2018, China’s lithium battery anode materials total shipments reached 192,000 tons, an increase of 31.2%.
Among them, Betray, Shanshan Technology, Jiangxi Zijing, Dongguan Kaijin, Xiangfenghua, Zhongke Xingcheng, Jiangxi Zhengtuo, Shenzhen Snow, Shenzhen Jinrun, Changsha Geji and other negative materials companies before the shipment ten.
In 2018, the shipment of TOP4 anode materials exceeded 25,000 tons, and the market share of TOP4 totaled 71%, up 4 percentage points from 2017, and the shipment of enterprises and head companies after the fifth place. The volume gap is expanding. The main reason is that the competition pattern of the power battery market has undergone great changes, resulting in a change in the competition pattern of the anode materials.
GGII statistics show that the total installed capacity of China’s power battery in the first half of 2019 was about 30.01GWh, a year-on-year increase of 93%. Among them, the total installed power of the top ten power battery companies totaled about 26.38GWh, accounting for about 88% of the overall.
Among the top ten power battery companies in terms of installed total power, only the Ningde era, BYD, Guoxuan Hi-Tech, and Lishen batteries are among the top ten, and the rankings of other battery companies are fluctuating every month.
Affected by changes in the power battery market, the market competition for anode materials has also changed accordingly. Among them, Shanshan Technology, Jiangxi Zijing and Dongguan Kaijin are mainly made up of artificial graphite products. They are driven by a group of high-quality customers such as Ningde Times, BYD, Yiwei Lithium Energy and Lishen Battery. Shipments increased significantly and market share increased.
Some of the negative electrode materials companies experienced a sharp decline in the installed capacity of the company’s negative battery products in 2018.
Judging from the current competition in the power battery market, the market of the top ten battery companies is as high as nearly 90%, which means that the market opportunities of other battery companies are becoming more and more rampant, and then transmitted to the upstream anode materials field, making a group of small and medium-sized anode enterprises face great Survival pressure.
GGII believes that in the next three years, the competition in the anode material market will further intensify, and the low-end repetitive capacity will be eliminated. Enterprises with core technologies and advantageous customer channels will be able to achieve significant growth.
The market concentration will be further improved. For the second and third-line anode materials enterprises, the operating pressure will undoubtedly increase, and it needs to plan the way ahead.
Post time: Oct-09-2019