The electrolyte plays the role of electron conduction between the two stages of the battery, accounting for 5%-6% of the cost of the lithium battery, which generally is composed of high-purity organic solvents, electrolyte potassium salts and necessary additives. Among them, the electrolyte lithium salt accounts for 60% of the total cost of the electrolyte, the organic solvent accounts for 30%, and the additive accounts for 10%.
Electrolyte Industry Chain
Upstream are mainly solvents, solutes, and additives. Common solvents are ethylene carbonate (EC), dimethyl carbonate (DMC), and others. The middle reaches are different forms of electrolytes mainly including liquid electrolytes, solid electrolytes, and molten salt electrolytes. Downstream of the main fields are power batteries, 3C lithium batteries, and supercapacitors.
The cost of electrolyte lithium salt as an electrolyte is large, in which the fluctuation of its product price has a greater impact on the electrolyte.
Although AsF6Li has excellent properties, it limits the wide application of AsF6Li due to the toxicity of arsenic. LiPF6is stable to the negative electrode, which has a large discharge capacity and a high electrical conductivity, but it is extremely sensitive to water and HF acidity. LiCLO4batteries have poor high-temperature performance, which is explosive, with a strong oxidant. Based on cost and safety, the current lithium salt is mainly lithium hexafluorophosphate whose price fluctuation will naturally have a profound impact on the price of the electrolyte.
The Rapid Growth of Domestic Lithium Battery Shipments
In 2019, the domestic power battery shipments were 71GWh, an increase of 9.2% year-on-year, which drives the demand for electrolytes. At the same time, the energy storage market in communication drove the shipment of energy storage battery electrolytes. And the small power market such as cars and power tools has entered a period of rapid development, whose demand for lithium batteries has risen rapidly. In 2019, electrolyte shipments in China were 183,000 tons, a year-on-year increase of 30%.
The Price of Electrolyte Drops and the Market Scale Grows Slowly
In recent years, electrolyte prices have continued to decline. Since 2016, the overall trend of the electrolyte prices in China has been sluggish. In early 2017, the price of lithium hexafluorophosphate electrolyte was 365 thousand yuan/ton, and by April 2020, the price had dropped to 77,000 yuan/ton.
The Price of Electrolyte Is Highly Correlated with the Trend of Its Main Components
Before 2012, lithium hexafluorophosphate in China mainly relied on imports. As there were not yet technological breakthroughs in domestic manufacturers, the product prices are at high prices. With the expansion of lithium batteries in 2015, the price of lithium hexafluorophosphate even surged to more than 400,000 yuan/ton, a top-level. After the second quarter of 2016, the huge profits led to expand the production capacity of supply-side companies. In 2017, with the release of new production capacity and the subsidy of downstream new energy vehicles, the industry's supply was relatively surplus. In 2017, there was a sharp decline, and the constantly declined price of lithium hexafluorophosphate.
As a result, the scale of the electrolyte market has grown slowly. The data shows that the domestic electrolyte market scale was 6.32 billion yuan in 2016 and 7.71 billion yuan in 2019.
Market Concentration Still Needs to Be Improved
From the perspective of the competitive landscape, the top three companies in terms of shipments in 2019 are Guangzhou Tinci Materials, Shenzhen Capchem, and Dongguan Shanshan. In 2019, the concentration of the electrolyte market has increased compared with 2018, but it still needs to be increased. The main reason for the increase is driven by LG, Panasonic, Murata, and other overseas battery companies. Another, the concentration of domestic power batteries and digital lithium batteries has increased, whose supply chain mainly comes from the top-ranked companies in each link, so the battery side has driven the increase in the concentration of the electrolyte side.
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