The battle between China, Japan and South Korea in the lithium battery industry chain

Subsequently, Japanese companies were forced to cut prices in order to regain market share, causing the price of lithium hexafluorophosphate to drop from 340,000 yuan per ton in 2010 to a low of 84,000 yuan per ton in the second quarter of 2015, a four-fold drop. This shows how much money the Japanese made at the time.

China's Dofluoro has become the world's second largest lithium hexafluorophosphate producer in 2015. As can be seen from the figure below, the world's first is Japan's Morita Chemical, the second is China's Dofluoro, the third is Japan's Ruixing Chemical, the fourth is China's Tianci Materials, and the fifth is China's Bicon Holdings.

In 2016, Dofluoro's operating income was 2.857 billion yuan, a year-on-year increase of 30.93%; its attributable net profit was 517 million yuan, a year-on-year increase of 1219.48% (2016 annual report). According to the company itself, its domestic market share was 30%, and its international market share ranked first in the world.

As mentioned earlier, Tianci Materials produces lithium hexafluorophosphate for its own electrolyte production.

Bikang Co., Ltd., the third largest battery manufacturer in China, achieved operating income of RMB 3.73 billion in 2016, an increase of 84.30% over the same period last year; and achieved net profit attributable to shareholders of listed companies of RMB 933 million, an increase of 65.02% over the same period last year. Of course, Bikang Co., Ltd. includes other businesses, but the growth of the electrolyte business is the main contribution.

Of the four core raw materials, three have been completely localized, or independent, because after all, some are still imported. The remaining one that has not yet been completely localized is the lithium battery separator, which is actually a layer of membrane used to isolate the positive and negative electrodes of lithium batteries to prevent short circuits. It must be able to play an isolation role and have good permeability to lithium ions so that the battery can charge and discharge normally.

The cost of the separator accounts for about 10% of the lithium-ion battery. In order to see the changes in the world market, let's first look at the global lithium battery separator market in 2008.

The figure below shows the world lithium battery separator market share in 2008. 90% of the world market is monopolized by the United States and Japan.

The first is Japan's Asahi Kasei with 29%, the second is the United States' Celgard with 23%, the third is Japan's Tonen with 23%, the fourth is Ube Industries with 7%, the fifth is South Korea's SK with 5%, and the seventh is Entech, an American company, with 4%.

Of course, South Korea can also produce a small amount, mainly for its own use.

At that time, the top three Chinese companies, Shenzhen Xingyuan Materials, accounted for only 2%, Green accounted for 4%, and Jinhui Hi-Tech accounted for 2%, totaling only 8%.

Moreover, Xingyuan Materials was only in trial production at the time and had not yet achieved large-scale sales, so this 2% share was really a stretch.

Eight years have passed. The following figure shows the global lithium-ion battery separator industry landscape in 2016 (actually data from 2015)

Japan's Asahi Kasei is still the world's number one, but its share has dropped from 29% to 18%.

Japan's Tonen Chemical ranks second in the world, with its share falling from 23% to 14%.

The third place went to the rising Korean company SK, with a share of 12%.

Celgard of the United States ranked fourth in the world, and its market share dropped from 23% to 10%. W-Scope of South Korea rose to fifth in the world, with 8%.

At the same time, Chinese diaphragm manufacturers also rose rapidly. Xingyuan Materials developed the fastest, increasing from 2% to 7%, followed by China Science and Technology at 5% and Jinhui Hi-Tech at 4%.

From the comparison between 2008 and 2016, we can clearly see the changing trend of the world, that is, the world market share of diaphragms has shifted from the United States and Japan to China and South Korea.

Among them, Celgard from the United States has actually been acquired by Asahi Kasei of Japan, which ranks first in the world, so the United States has withdrawn from the competition. It seems that the United States is really a good example of deindustrialization.

In fact, although the above picture shows the global situation of lithium battery separators in 2016, it uses data from 2015.

In the above chart, Star Materials ranks sixth in the world. In 2016, Star Materials achieved annual operating income of 506 million yuan, an increase of 18.97% over the same period last year; net profit attributable to common shareholders of listed companies was 155 million yuan, an increase of 31.34% over the same period last year. Star Materials has now surpassed the fifth-ranked South Korean W-scope and jumped to fourth place in the world (Celgard and Asahi Kasei are now one company)

As the largest diaphragm manufacturer in China, Chen Xiufeng, chairman of Xingyuan Materials, talked about why they wanted to make diaphragms when he was interviewed by a reporter in December 2016, and he made three interesting points.

1: Before the Chinese started to make lithium battery separators, the lithium battery separators monopolized by the Japanese were making huge profits

"By 2003, the positive electrode, negative electrode and electrolyte of lithium batteries had all been domestically produced, but the separator had always been dependent on imports and was subject to foreign control, so the price was also very high. At that time, the PP and PE raw materials for making separators were about 20,000 yuan/ton, but after being made into separators, the value reached more than 3 million yuan/ton, which was a huge profit. Moreover, small lithium battery plants could not buy separators. Japanese manufacturers required payment before delivery, and required payment 45 days in advance. They also had to review your qualifications and prohibited military use."

2: The Japanese refused to provide technical cooperation opportunities, and Xingyuan Materials began to look for Sichuan University for independent research and development

"We originally wanted to find Japanese partners, but the Japanese believed that this technology was their state secret and strictly prohibited leakage, so we found Sichuan University. Sichuan University is very strong in the field of polymers in the country. So since 2003, we have cooperated with Professor Xiang Ming of Sichuan University and started to invest in research and development. By 2006, we had mastered the wet-process diaphragm preparation technology and built a pilot production line. In 2007, we broke through the key technology of dry-process diaphragm preparation. Since the wet-process diaphragm production line requires a large investment, we first built our dry-process diaphragm production line in 2008. Therefore, Xingyuan Materials is also the first company in the world to master both dry-process and wet-process diaphragm preparation technologies."

3: The first to buy Xingyuan materials is the Chinese lithium battery manufacturer

On August 18, 2008, we produced the first roll of membrane, which was also the first roll of dry-process single-pull diaphragm in China, which was a milestone. Because the preparation process of diaphragm is complicated and there are many technical points, when the product first came out, some physical properties and appearance were still somewhat different from those of foreign products. However, once the key principle technology was broken through and the process and equipment were continuously optimized, the progress was very fast. By March 2009, the product officially entered the market. Our product was first supplied to AVIC Lithium Battery, and entered BYD's supply chain in May 2009.

In 2011, the new energy market was booming, and Xingyuan Materials quickly won high-quality customers such as Tianjin Lishen, Guoxuan High-tech, Wanxiang Group, Zhongju Battery, and Utelli. In 2013, Xingyuan Materials was favored by South Korea's LG Chem and became its lithium battery separator supplier. This also achieved a breakthrough in the export of domestic separators.

I have repeatedly emphasized the point in my previous articles that if you want to develop the upstream, you must first develop the downstream. Xingyuan Materials began production in 2008 and began supplying the market in large quantities in 2009. The first company to buy its products was AVIC Lithium Battery, the second was BYD, and later Lishen, Guoxuan High-tech, Wanxiang, etc., all of which were Chinese companies. It was not until 5 years later in 2013 that the first foreign company, LG Chem, began to purchase Xingyuan Materials' products.

Who says that industrial competition has no national or ethnic boundaries? Facts will tell you again and again that when a Chinese company needs to survive at the critical moment of starting up, only its own people will help it.

On the Chinese Internet and Zhihu, so-called "rational people" constantly analyze that the nation is an imaginary community, trying to negate the existence of the Chinese nation and prove that patriotism and nationalism are meaningless.

However, facts have repeatedly told you that the country and nation are not imaginary, but a real community of interests. Every Chinese person around you, every Chinese company that is struggling to compete with European, American, Japanese and Korean companies, is closely related to your interests, and their efforts and endeavors will also benefit you.

The world's top ten diaphragm companies include Xingyuan Materials and several excellent Chinese companies.

And they have all maintained super-high growth, indicating that the diaphragm field is rapidly undergoing domestic substitution, and Chinese companies are rapidly eliminating the last blind spot of the four core raw materials.