Demand for high nickel cathodes and power supplies surges， entering a new phase of competition

Global sales of new energy vehicles have surged, and the market penetration of high-nickel power batteries has accelerated.

On the application side, overseas electric vehicle sales have further increased, ternary batteries occupy the mainstream position, and mid-to-high-end models mostly adopt high-nickel technology routes, driving leading battery companies in China, Japan and South Korea, including CATL, Panasonic, LG Energy, Samsung SDI, and SKI. The installed capacity of high-nickel batteries in the international market has grown significantly.

On the supply side, the top battery companies in Japan and South Korea have announced that they are about to mass-produce or even mass-produce ultra-high nickel battery products with a nickel content of more than 90% in 2021, thereby accelerating the industrialization of upstream high-nickel precursors and high-nickel cathode materials.

At the same time, in order to ensure stable supply of raw materials and reduce procurement costs, leading battery companies and OEMs are also actively deploying upstream raw materials, locking in the supply of upstream high-nickel cathodes through strategic procurement or joint venture construction.

With the increasing demand for high-nickel batteries from OEMs, from nickel-cobalt ore companies to cathode material companies to battery manufacturers, they are also accelerating the R&D and mass production of new high-nickel products, and starting a capacity expansion model.

The high nickel cathode and high nickel power market will enter a new stage of competition.

Cathode market demand surges

The strong demand in the downstream market has stimulated the overall prosperity of the upstream lithium battery materials.

Market data shows that in the first half of 2021, the global installed capacity of NCM811 batteries increased by 276% year-on-year, driving a substantial increase in NCM811 material shipments; the market share of high-nickel cathodes increased to 38%, and the trend of overseas high-nickelization became more and more obvious.

Shipments of high-nickel batteries from Chinese, Japanese and Korean battery companies, including CATL, Panasonic, LG New Energy, Samsung SDI, and SKI, have further increased, resulting in strong demand for high-nickel cathode materials.

In the first half of the year, China’s leading ternary material companies, including Rongbai Technology, Bamo Technology, Dangsheng Technology, Zhenhua New Materials, and Long-term Lithium Technology, saw a significant year-on-year increase in shipments. Among them, the shipment of high-nickel cathode materials increased significantly year-on-year.

Among them, Rongbai Technology’s shipments of ternary materials in the first half of 2021 exceeded 20,000 tons (of which more than 90% were high-nickel ternary cathode materials), an increase of about 135% year-on-year. Net profit and profit per ton increased significantly year-on-year, and market share rate was further improved.

In the third quarter of 2021, Rongbai Technology achieved revenue of 2.66 billion yuan, a year-on-year increase of 138.7%; net profit was 230 million yuan, a year-on-year increase of 284.7%. Among them, the sales of NCM811, Ni90 and above ultra-high nickel series products increased by about 20% month-on-month.

In addition, shipments of high-nickel cathodes from foreign brands including Posco Chemical, L&F, Sumitomo Metal, and Umicore also increased significantly year-on-year, mainly supplying the international market.

In order to meet the growing demand of the downstream market, the above-mentioned cathode material companies are actively expanding the production capacity of ternary materials, among which high-nickel cathode materials have become the focus of the new production capacity projects of the above-mentioned enterprises.

While expanding the production capacity of high-nickel cathodes, cathode material companies also have strong demand for high-nickel precursors. Huge purchase orders have landed one after another, and China’s top ternary precursor companies have benefited significantly.

For example, GEM signed two supply agreements with South Korean cathode material supplier ECOPRO BM. ECOPRO BM will purchase a total of 826,000 tons of high-nickel ternary precursors from GEM from 2021 to 2026. Lay the foundation for the growth of GEM’s nickel precursor market share.

At the same time, the export business of high-nickel precursors of Zhongwei Co., Ltd. has also continued to grow, and the proportion of the international market has further increased. The company’s existing products with high-nickel series account for more than 80%, and the demand for foreign supply exceeds domestic demand.

On the whole, the continuous growth of downstream market demand provides a guarantee for ternary material companies and precursor companies to accelerate the research and development of new products and expand high-nickel production capacity. The first-tier enterprises will have stronger competitive advantages in terms of production capacity, product quality, product structure and customer groups.

The race for ultra high nickel batteries heats up

While the shipments of high-nickel batteries continue to grow, the market competition among leading battery companies in China, Japan and South Korea in the field of ultra-high nickel batteries is also rapidly heating up. On Battery Day 2021, Musk unveiled his ultra-high nickel end-state battery with 100% nickel, and accelerated the mass production of his new 4680 battery.

On the high-nickel battery track, leading players including CATL, Panasonic, LG Energy, Samsung SDI, SKI, etc. have mass-produced and supplied NCM and NCA batteries with a nickel content of over 80%, and aimed at a nickel content of 90%. % or more ultra-high nickel batteries.

In early 2021, SKI revealed its new “SK Inside” brand strategy and showcased the latest NCM 9/0.5/0.5 system, reducing the cobalt content to 5%. SKI announced that it is now ready for mass production of NCM 9/0.5/0.5 batteries, and is waiting for orders from automakers, which can provide 700km of range and shorter charging time.

Samsung SDI showcased its latest battery technology at InterBattery 2021 in South Korea, including NCA batteries with a nickel content of over 90%.

Samsung SDI confirmed that the company has started production of NCA cylindrical batteries with a nickel content of 91%, which will be used in the field of electric vehicles, and the commercialization of 91% nickel content square NCA batteries will be delayed for several years. In the future, the nickel content of its high-nickel batteries will be further increased to 94% or even higher.

LG Energy will currently focus on the field of quaternary batteries, and plans to officially mass-produce NCMA ultra-high nickel batteries (90% nickel content) and supply Tesla in 2021.

At the same time, LG Energy and General Motors also established a joint venture battery company called Ultium Cells in the United States to produce and supply NCMA quaternary batteries for General Motors by 2022.

Panasonic adheres to the NCA route on the high-nickel battery technology route, and has now supplied Tesla with NCA batteries with a cobalt content of less than 5% on a large scale. And it said it would increase the energy density of the 2170 cylindrical battery supplied to Tesla by 20% over the next five years, with plans to deliver cobalt-free batteries between 2022 and 2023.

CATL has mass-produced and supplied the first-generation NCM811 battery, and has become the leader in high-nickel batteries in China. Its second-generation NCM811 battery will add a silicon carbon anode, and a high-nickel battery sample with a specific energy of 304Wh/kg has been manufactured, or it will be mass-produced in 2021.

The top battery companies in China, Japan and South Korea have targeted the next generation of batteries with high nickel batteries or solid-state batteries with a nickel content of more than 90% or even completely free of cobalt, and have formulated a relatively clear mass production schedule.

Under this circumstance, the international market competition for high-nickel materials and high-nickel batteries will also be further upgraded, thereby driving the rapid development of the high-nickel battery industry chain.