The White Paper on the Development of China's Lithium Hexafluorophosphate Industry (2022) shows that in the first half of 2022, the global shipment of lithium hexafluorophosphate was 56000 tons, which is close to last year's global shipment. EVTank predicts that the global shipment of lithium hexafluorophosphate will reach 130000 tons for the whole year of 2022.
Driven by the market pattern of supply shortage, the price of lithium hexafluorophosphate skyrocketed by 410% last year. Since February of this year, the price of lithium hexafluorophosphate has continued to decline from its historical high, and has been "halved" at one point.
The White Paper on the Development of China's Lithium Hexafluorophosphate Industry (2022), jointly released by research institution EVTank and Evie Economic Research Institute, shows that according to the progress of various enterprises' under construction production capacity, the nominal production capacity of lithium hexafluorophosphate in the entire industry will reach 220000 tons by the end of 2022, and 405000 tons by 2023. The supply-demand relationship of the entire industry will change by the end of 2022. The nominal planned production capacity of lithium hexafluorophosphate worldwide is severely overcapacity.
The white paper shows that in 2021, the global shipment of lithium hexafluorophosphate was 69900 tons, a year-on-year increase of 48.7%. In the first half of this year, the global shipment of lithium hexafluorophosphate was 56000 tons, which is close to the total shipment of last year. It is expected that the global shipment of lithium hexafluorophosphate will reach 130000 tons for the whole year.
Regarding the claim of overcapacity in lithium hexafluorophosphate, leading enterprises have stated that it is a false proposition and can only be described as announced overcapacity. At present, the actual supply and demand situation in the industry is still in a tight balance. After a certain market adjustment, the release of production capacity by second - and third tier manufacturers has stagnated, leaving only one or two top enterprises able to start production as planned.
Some research institutions have also warned that if the newly added production capacity can be released as scheduled, the lithium hexafluorophosphate market may experience supply-demand balance or even an early oversupply situation in the fourth quarter.
Lithium ion batteries consist of a positive electrode, a negative electrode, an electrolyte, and a separator. The electrolyte is known as the "blood" of lithium-ion batteries, and lithium hexafluorophosphate is the core of the electrolyte. On the one hand, the performance of lithium hexafluorophosphate determines the ion conductivity, high and low temperature stability, and other properties of the electrolyte. On the other hand, lithium hexafluorophosphate is the cost center of electrolytes, and its price fluctuations greatly affect the trend of electrolyte prices.
During a research activity conducted by an organization, it was stated that the claim of overcapacity in lithium hexafluorophosphate is a false proposition and can only be described as an announced overcapacity. Currently, the actual supply and demand situation in the industry is still in a tight balance. The rapid decline in individual order prices before was due to the impact of the epidemic on demand. The shelf life of lithium hexafluorophosphate is only 3 to 6 months, which has led some small and medium-sized manufacturers to clear their inventory. This is an irrational decline caused by human factors, rather than a true reflection of market supply and demand.
Experts say that lithium hexafluorophosphate has a longer production expansion cycle due to its involvement in fluorine chemical industry, which is a hazardous chemical industry. According to statistics from Shanghai Nonferrous Network, by the end of 2022, the designed production capacity of lithium hexafluorophosphate in the market will be around 210000 tons, with many new and small factories put into operation, but there is uncertainty. On the one hand, the ramp up speed of production capacity in the early stage of the new factory is slow, and the quality of products in the early stage is unstable; On the other hand, due to the lack of stable downstream demand, the effective capacity increment of small factories is limited. At present, the new production capacity of mainstream large factories is in the climbing stage, and the supply of lithium hexafluorophosphate has not increased significantly in the short term.
The above-mentioned person in charge also stated that the statement about overcapacity of lithium hexafluorophosphate in the market is somewhat debatable. On the one hand, downstream battery demand is still in the expansion stage; On the other hand, there are also variables in the nominal planned production capacity, and it remains to be seen whether it can be put into operation and reach production capacity. But overall, the production capacity of the entire industry is still increasing, and the future prices should not be optimistic.
From 'hard to find goods' to' price decline '
Due to severe supply shortages, lithium hexafluorophosphate experienced a fierce rise in 2021, making it a true "price king". In the first quarter of this year, the market price of lithium hexafluorophosphate soared to 599000 yuan/ton, reaching a historic high.
Subsequently, under the influence of factors such as the epidemic, the pattern of mismatched supply and demand of lithium hexafluorophosphate was broken, and market prices entered a rapid downward channel. Entering the second quarter, its market quotation was once halved, with the lowest reaching 254500 yuan/ton.
Why has lithium hexafluorophosphate gone from "difficult to find" to "price decline"? According to experts, from the perspective of raw materials, the price of lithium salts, the main raw material for lithium hexafluorophosphate, has fallen since March, reducing the cost pressure on lithium hexafluorophosphate. From the supply side, by the end of 2021 and the first half of 2022, some manufacturers will increase their production capacity and ramp up, which will alleviate the pressure on market supply. From the demand side, downstream battery factory demand has continued to weaken since March.
In addition, the price decline is also related to the characteristics of lithium hexafluorophosphate. Solid lithium hexafluorophosphate has a shelf life of only about six months and strict storage conditions. Manufacturers and electrolyte manufacturers usually do not stockpile too much inventory, "said Liu Yujun.
Since the third quarter, with the rise in prices of raw materials such as lithium carbonate and the recovery of downstream procurement demand, the price of lithium hexafluorophosphate has rebounded. Data shows that as of September 7th, the market price of lithium hexafluorophosphate was 272500 yuan/ton, an increase of 11% from the end of the second quarter.
In terms of raw material costs, the increase in lithium carbonate prices may have a significant impact on the pricing of lithium hexafluorophosphate. A manufacturer in Shanghai stated in a recent research activity that their inventory of low-priced lithium carbonate was depleted in July, and the lithium carbonate needed for production is now purchased at a certain discount based on market prices. Starting from the third quarter, the cost of lithium hexafluorophosphate will increase compared to the first and second quarters, and it is not ruled out that some order product prices may be adjusted.
Looking ahead to the future, some institutions believe that lithium hexafluorophosphate, as a supply-demand oriented product, may experience a temporary supply shortage in the third quarter. If the newly added production capacity can be released as scheduled, the lithium hexafluorophosphate market in the fourth quarter may experience supply-demand balance or even reach a situation of oversupply ahead of schedule.
Experts say that the possibility of a significant price increase for lithium hexafluorophosphate like last year is very small. In the future, the price of lithium hexafluorophosphate may fluctuate within a reasonable range.
Lithium hexafluorophosphate 'substitute' receives market attention
Lithium hexafluorophosphate is currently the most widely used electrolyte solute. However, lithium hexafluorophosphate has disadvantages such as poor thermal stability and easy hydrolysis. In contrast, lithium difluorosulfonylimide has better performance and may become a "substitute" for lithium hexafluorophosphate.
In terms of performance, lithium difluorosulfonylimide has high conductivity, high thermal stability, and is not easily hydrolyzed. Theoretically, it can be used as a next-generation lithium salt electrolyte to replace lithium hexafluorophosphate in lithium-ion batteries. At present, due to the high technological threshold, there are very few manufacturers in the industry that can truly produce this product. The industry's production capacity is insufficient, the product cost is relatively high, and downstream applications are relatively limited. Therefore, lithium difluorosulfonylimide is temporarily used as an additive for lithium hexafluorophosphate to improve battery capacity and electrochemical performance.
With the advancement of technology and the reduction of costs, it is expected that the proportion of lithium difluorosulfonyl imide added to some new batteries will increase. The industry is also optimistic about the future market prospects of lithium difluorosulfonyl imide. As sodium ion batteries gradually enter industrialization, their electrolyte solute sodium hexafluorophosphate is also gradually entering the public eye.
(Source: Shanghai Securities News)
Jiahang Technology specializes in battery electrolyte related products and closely monitors industry trends. We will verify product supply and demand information through market testing.
