Leading companies jointly build new battery material projects
On August 4, Weiming Environmental Protection announced that the company plans to build a new material project for lithium batteries in Wenzhou with Weiming Shengqing as the main body of implementation. The project will be implemented in stages, the total investment of the project will not exceed RMB 19.1 billion, and the company will invest in the project with its own funds not exceeding RMB 3.45 billion.
On the same day, Weiming Environmental Protection signed the “Wenzhou Lithium Battery New Material Industry Base Project Joint Venture Agreement” with the four leading companies of Chengtun Mining, Yongqing Technology and Sunwoda. It is reported that the lithium battery new material project includes high-nickel matte refining, high-nickel ternary precursor production, high-nickel cathode material production and related supporting projects, with an annual output of 200,000 tons of high-nickel ternary cathode materials.
The total investment in the planning and construction of the project is about RMB 11.5 billion, and the total demand for working capital during the operation period after full production is about RMB 7.6 billion. The total land is expected to be about 1,500 mu.
Four leading companies cooperate in the construction of new battery material projects
The four partners of the new battery material project have a strong lineup. Weiming Environmental Protection, one of top 5 cobalt manufacturers in China Chengtun Mining, Yongqing Technology and Sunwoda are all leading companies in the industry. The main business of Weiming Environmental Protection is municipal solid waste incineration power generation business. This investment is the company’s first entry into the battery new material manufacturing industry. However, before this, Weiming Environmental Protection has been involved in the production of high nickel matte:
In January of this year, Weiming Environmental Protection revealed that its controlling shareholder Weiming Group Co., Ltd. and Indigo cooperated to jointly build a high nickel matte project with an annual output of 40,000 tons in Indonesia. On August 4th, Weiming Hong Kong Company, a wholly-owned subsidiary of Weiming Environmental Protection Company, signed a joint venture agreement with Merit Company and Hong Kong Xinwei on the investment and construction of a high nickel matte project.
The company intends to establish a joint venture project company with Merit and Hong Kong Xinwei, of which the company will invest no more than 71 million US dollars in the project company with its own funds this time, which is equivalent to no more than 480 million RMB. The high nickel matte project has an annual output of 40,000 tons of high nickel matte nickel-containing metal, and the total project investment does not exceed 390 million US dollars.
Chengtun Mining’s main business is non-ferrous metal mining and processing business, cobalt material business, metal trade and industrial chain services. The company focuses on the new energy industrial chain, controls resources, and expands materials. The business scope of Yongqing Technology is the research and development, production, processing, sales and related technical services of metal nickel materials and battery materials;
The controlling shareholder of battery management system equipment, power battery system equipment, etc. is Tsingshan Group. Tsingshan Group began to enter the new energy industry in 2017 by relying on its own rich nickel ore resources. Weiming Environmental Protection Announcement shows that on April 24 this year, Weiming Environmental Protection signed an agreement with Shengtun Mining and Tsingshan Holdings.
The three parties plan to jointly plan and invest in the development and construction of high-nickel matte refining, high-nickel ternary precursor production, high-nickel cathode material production and related supporting projects in Wenzhou City.
In June, Tsingshan Holdings transferred its 19% stake in Weiming Shengqing to its holding subsidiary Yongqing Technology. After the transfer, Weiminghuan maintained 51% of the shares, Chengtun Mining held 30%, and Yongqing Technology held 19%.
Sunwoda is mainly engaged in the research and development, design, production and sales of lithium battery cells and modules. In June this year, Sunwoda ranked sixth among Chinese top 10 lithium marine battery manufacturers in the month with a power battery loading capacity of 0.64GWh, accounting for 2.37%.
In cooperation, Sunwoda plans to transfer part of the equity of the joint venture company held by Chengtun Mining together with Weiming Environmental Protection and Yongqing Technology. After the aforementioned equity transfer is completed, Weiming Environmental Protection will hold 60% of Weiming Shengqing, Yongqing Technology will hold 20%, Chengtun Mining will hold 10%, and Sunwoda will hold 10%.
According to the progress of the project implementation, Weiming Environmental Protection will, together with Chengtun Mining, Yongqing Technology and Sunwoda, increase the capital of Weiming Shengqing in the same proportion.
Companies are optimistic about the prospect of ternary high nickel
High nickelization of ternary materials refers to increasing the content of nickel elements in ternary materials, thereby increasing the energy density and correspondingly reducing the dependence on cobalt elements. Based on the perspective of reducing costs and improving battery life of electric vehicles, high-nickel ternary materials have become the development trend of the industry. In 2022, the demand for high-nickel ternary cathodes in major global markets is expected to exceed 400,000 tons.
The layout of the four companies in this track is precisely because of the huge prospect of high-nickel ternary. Weiming Environmental Protection said that as the core key material of lithium batteries, the improvement of its electrochemical performance and manufacturing technology research and development of cathode materials is an important technology research and development focus, breakthrough and driving force to promote the popularization and application of lithium batteries.
High-nickel ternary batteries have obvious advantages such as high energy density, good cycle performance, high cruising range, and controllable cost, which are in line with the development trend of new energy vehicles with long battery life and high performance. In the future, the market demand for high-nickel ternary cathode materials will grow rapidly .
Data shows that in 2021, the global shipments of high-nickel ternary materials will reach 300,000 tons, a year-on-year increase of 120%, accounting for about 42% of the total shipments of ternary cathode materials. In that year, the total output of high-nickel materials (811 and NCA types) in China alone has reached 152,000 tons, a year-on-year increase of more than 220%.
According to statistics, from January to June 2022, the cumulative output of high-nickel materials (8 series and above) in China was 112,200 tons, a year-on-year increase of 83.9%, and the penetration rate exceeded 40%. The ternary high nickel link will be the link with the fastest demand growth in the next few years, with an average annual compound growth rate of 53% from 2022 to 2025.
It is worth noting that the 9-series materials have gradually entered the stage of high-nickel materials. In the first half of the year, the Ni90 of Rongbai Technology and the NCMA of Tianjin Bamo were eye-catching in the Chinese market. With the further advancement of industrialization in the second half of the year, it is expected to drive the production and sales of related materials to continue to increase.
Many car companies choose high nickel power battery technology route
As a commercial solution to achieve high-end application scenarios and high cruising range, many multinational car companies have begun to choose the high-nickel power battery technology route. BMW, Volkswagen, Daimler, Hyundai, GM, and Ford have launched a variety of mid-to-high-end passenger vehicles. For car models, the battery technology route is inclined to high-nickel batteries, which in turn generates strong demand for high-nickel batteries.
In terms of enterprises, leading battery top 10 power battery companies in the world, such as CATL, LG New Energy, Samsung SDI, SKI, and Panasonic, have already started mass production and supply of high-nickel batteries. Institutional research shows that GEM, Zhongwei Co., Ltd. and Huayou Cobalt are far away from other companies in terms of shipments.
To a certain extent, this also means that the market concentration of high-nickel ternary cathodes will be further improved, and the differentiation of the industry pattern will be intensified.