Research and Analysis Report on China’s Lithium Battery Cathode Materials in 2018

In 2018, China’s total output value of cathode materials reached 53.5 billion yuan, up 27.66% year-on-year. Total shipments were 275,000 tons, up 30 percent year-on-year.

Among them:

NCM materials shipped 137,000 tons, with a year-on-year growth of 58.9% and an output value of 23 billion yuan, with a year-on-year growth of 33%. 

LFP material shipments were 58,000 tons, down 1.2% year on year, and the output value was 3.99 billion yuan, down 20% year on year.

LCO shipped 54,000 tons of materials, up 22.4 percent year-on-year. LMO materials shipped 26,000 tons, up 14.5 percent year-on-year. 

Driven by the new energy passenger car market, ternary materials have become the  main growth point of the cathode materials market, while the lithium iron phosphate market has been continuously replaced by ternary materials, with the shipment volume shrinking year on year.

The scale of China’s cathode materials market grows rapidly in 2018. 

The main reasons are as follows: 

1. Domestic terminal electric vehicles and 3C digital products continue to grow, especially electric vehicles, directly driving the rapid growth of domestic demand for ternary materials.
2. The new subsidy policy is linked to the energy density, which makes the development trend of power batteries to the ternary battery line more obvious, and stimulates the upstream ternary material enterprises to expand production one after another.
3. The export volume of mobile phone manufacturers increased significantly, driving the shipment of upstream lithium cobalt oxide batteries and cathode materials

In addition, foreign enterprises gradually reduce the production of lithium cobalt oxide, ternary materials, lithium cobalt oxide exports to Japan and South Korea increased.

In 2018, NCM materials saw the fastest year-on-year growth in shipments in the cathode material segment. In 2018, the market size of China’s ternary nickel-cobalt lithium manganate cathode materials reached 23 billion yuan, up 33% year-on-year.

The main reasons for the growth are as follows:

1. In 2018, new production capacity of downstream ternary cell enterprises will be released, and procurement of ternary materials will be increased.
2. New energy vehicles and subsidy standards are linked to battery energy density.
3. Ternary power batteries replace lithium iron phosphate power batteries, and the demand for ternary cathode materials grows rapidly.

From the perspective of NCM material subdivision products, the sales volume of ncm 5.23 million tons in 2018 is still 87,000 tons, which is still the mainstream of ternary materials at present, with a year-on-year growth of 58.2%. NCM111 sales volume: 88,000 tons, up 50% year-on-year; NCM622 sold 18,000 tons, up 25.3 percent year-on-year. In the market of high nickel ternary materials (NCM811, NCA), nearly 10,000 tons will be shipped in 2018.

In terms of the price of cathode materials, the price of lithium carbonate, cobalt and other metals, the upstream raw materials of cathode materials, will decline in 2018. The overall price will continue to decline from the second quarter of 2018. It is expected that the global capacity of lithium carbonate and nickel sulfate will be gradually released in 2019-2020.