The supply and demand of electrolyte solute is tight, power battery head companies may usher in new opportunities

Since April, the China Securities New Energy Vehicle Index has risen by more than 20%, reflecting the multiple positives of the industry: the sales of new energy vehicles in the first quarter increased significantly year-on-year, and the quarterly report of the sector was outstanding; in the future, various auto companies will intensively launch new models to stimulate the market; The lithium battery industry chain reflects the demand of the whole industry to a new level in the second half of the year
.

Statistics show that the current global penetration rate of electric vehicle sales is less than 5%, and there is still a lot of room for improvement; governments and car companies around the world have formulated long-term plans for the transformation of electric vehicles
.
In the medium and long term, the electrification of automobiles is in line with the global green and carbon reduction development path.

Power batteries will fully benefit from the general trend of electrification of automobiles, and various related raw materials are in a good business climate

In the short term, the electrolyte is a choke point in the supply of lithium batteries.
Since the second half of 2020, the volume and price of products have risen.
In 2021, the performance of related companies is expected to maintain a relatively high growth, and there are good investment opportunities
.

The competitive advantage of electrolyte manufacturers first comes from technical formulas.
Electrolyte manufacturers have long-term cooperation with battery customers, customized development, and provide additives.
Especially power batteries pursue high energy density and use more and more high nickel cathode materials.
The technical requirements for electrolyte are getting higher and higher; second, from the cost of raw materials, first-line electrolyte manufacturers produce key raw materials for solutes and solvents on their own to reduce raw material costs and ensure the safety of the supply chain
.

The main solute of the electrolyte is lithium hexafluorophosphate (hereinafter referred to as 6F), the mass proportion is 10%-15%, and the cost proportion is 30%-45%
.
6F is a high-risk and explosive chemical.

It is difficult to build a factory in the environmental review and approval process, and the expansion time is more than one year.

In history, its price has two major cycles: from 2015 to 2016, the price of 6F rose from less than 100,000 yuan/ton to more than 400,000 yuan/ton, and from 2016 to 2020, it gradually dropped to less than 100,000 yuan/ton.
The industry was fully released.
Qing; Since the second half of 2020, the price of 6F has risen again, and the current bulk order price has reached 250,000 to 300,000 yuan/ton; the demand for lithium batteries in the second half of this year has entered the peak season, and the new capacity will gradually start in the fourth quarter.
Supply and demand Will tighten further
.
After the downward cycle from 2016 to 2020, the 6F industry's competitive landscape tends to be concentrated.

The top three production capacity accounts for more than half of the world, and future new production capacity may come from this

The 6F industry cycle also drives the electrolyte industry cycle.
Because electrolyte pricing mainly anchors 6F prices, the gross profit margin of leading companies in the electrolyte industry market share exceeded 40% in 2016, while the industry trough is only more than 20%, 2020 It returned to more than 30% in 2016, reflecting the cycle of product prices peaking in 2016 and bottoming out in 2020.
The cycle characteristics are more obvious
.

At the same time, the concentration of the electrolyte industry has increased.
The market share of the four manufacturers from 2016 to 2020 has risen from below 50% to more than 65%, and the market share of leading companies has risen from about 20% to nearly 30%
.
This year, the supply and demand of 6F are tight, and the price of electrolyte is also rising.

Electrolyte manufacturers that have 6F self-production capacity or even actively expand production can ensure sufficient supply of 6F and the cost remains unchanged.

Currently, the new additive lithium bisfluorosulfonimide (LiFSI) has a thermal stability and electrical conductivity higher than 6F, which can effectively improve the weather resistance and cycle life of lithium batteries, and can be used in conjunction with 6F
.
LiFSI was the first company in Japan and South Korea to achieve mass production.

At present, many domestic companies have mass production capacity

However, the industry is still in the early stage of development, and the production and sales are only in the order of 1,000 tons, and the price is 400,000 to 500,000 yuan/ton, which is much higher than 6F
.
In the future, as the LiFSI technology matures, the price is expected to drop and the penetration rate will rise sharply

.

At the beginning of this year, new energy car companies mentioned plans to install solid-state batteries next year, triggering market concerns about the development of electrolytes
.
Solid-state batteries are divided into two types: pure solid-state and semi-solid.

At present, solid-state battery start-ups mainly choose the semi-solid technology route, using gel electrolyte, which still contains electrolyte components, but the amount of solvent has been reduced, and electrolyte manufacturers can switch to supply Electrolyte material

Moreover, semi-solid battery technology is immature, and product performance and cost cannot be compared with existing lithium batteries.
It is expected that it will be difficult to promote on a large scale within five years.
Therefore, investors should not be overly concerned about the impact of battery technology routes on the electrolyte industry
.

In addition, in terms of investment in electrolyte companies, we suggest keeping up with the boom in the power battery industry, and in the upward cycle of the economy, grasping the leading companies with a leading market share, and enjoying the double-click opportunity of Davis brought by capacity expansion and price increases
.

Specifically, the advantages of investing in leading companies are as follows: First, excellent customer structure, close cooperation with head battery factories, rich technology accumulation, and growth with major customers
.
The second is the high cost advantage, mainly through the upstream integration method, independent production of 6F, additives, solvents and other key raw materials

.