Analysis of the future market of five major raw materials for new energy vehicles

The main investment theme of the new energy vehicle industry chain has been very clear since its development: downstream growth will continuously change the supply and demand of raw materials and eventually stimulate price increases. Therefore, in the face of a vast incremental space, we must firmly occupy the upstream.

Energy Hardware 1: Lithium Carbonate

Whether it is lithium iron phosphate positive electrode material or ternary positive electrode material, lithium carbonate is indispensable. Taking Tesla Model S as an example to calculate the lithium carbonate equivalent demand of a new energy vehicle: Panasonic NCR18650 battery cell weight is 44g, Panasonic official website explains that the weight of positive electrode material in 18650 battery accounts for 20-35%. Assuming that its positive electrode material is about 30%, the weight is about 15 grams. NCA chemical formula Li (Ni _0.8 Co _0.15 Al _0.05 ) _x O ₂ , after calculation x=0.845, the molecular weight is 87.5; lithium carbonate molecular formula Li ₂ CO ₃ , molecular weight is 74. According to the ratio of lithium element to lithium, the weight ratio of the two is 74: (87.5×2) =0.423: 1. It can be seen that 1 gram of lithium cobalt nickel aluminum ternary positive electrode material requires 0.423 grams of lithium carbonate. The production of one 18650 NCA ternary battery positive electrode material requires 15×0.423 = 6.345g of lithium carbonate. A Model S uses 7104 18650 batteries, which is equivalent to 7104×6.345g=45.1kg of lithium carbonate. Adding the demand for lithium carbonate and industrial consumption of lithium hexafluorophosphate electrolyte, it is estimated that a Model S requires about 82kg of lithium carbonate equivalent, which is equivalent to 1kg/kWh.

Lithium carbonate: It is difficult to release lithium carbonate on a large scale. On May 18, 2017, the unit price of lithium carbonate reached 140,000 yuan/ton and has remained high ever since. The specifications of new energy vehicles vary. According to statistical calculations, the consumption of a single vehicle is 1kg/kwh. In 2016, the global annual production was about 220,000 tons. Corresponding targets: Tianqi Lithium, Ganfeng Lithium, Jiangte Motor, and Western Mining.

Energy Metal 2: Cobalt

Cobalt is an essential upstream raw material for NCA and NCM ternary materials. As the trend of ternary materials replacing lithium iron carbonate becomes increasingly clear, the demand for cobalt is also rising. The demand for cobalt in NCA ternary materials is about 0.14 kg/kWh.

Cobalt: The Democratic Republic of Congo controls 60% of the world's production. The concentrated supply side has a strong financial attribute. We are very optimistic that the African rainy season in October (lasting for half a year) will stimulate the upward movement of cobalt prices. In June and July 2017, the average price of cobalt metal exceeded 400,000 yuan/ton. The specifications of new energy vehicles vary. According to our data, the usage of a single vehicle is: 1kWh for the 333 model corresponds to 0.39 kg, and 1kWh for the NCA model corresponds to 0.14 kg. According to the China Industry Information Network, the global annual production in 2016 was about 100,000 tons. Corresponding targets: Huayou Cobalt, Luoyang Molybdenum, Shengtun Mining.

Energy Hardware 3: Copper Foil

According to different production processes, copper foil is divided into rolled copper foil and electrolytic copper foil. Rolled copper foil is generally used as a building decoration material. Since copper foil has good conductivity, soft texture, good ductility and easy processing and deformation, it is also the preferred material for making negative electrode current collectors of lithium batteries. The function of lithium-ion battery current collectors is to collect the current generated by the active materials of the battery in order to form a larger current output. Therefore, the current collector should have a low specific surface energy so that it is easy to fully contact with the active materials and have excellent conductivity.

At present, most lithium battery manufacturers at home and abroad use electrolytic copper foil as the negative electrode current collector of lithium batteries. In recent years, the rapid development of new energy vehicles has led to a rapid increase in the demand for lithium batteries required for new energy vehicles. Copper foil is an important raw material for lithium batteries, and its demand has naturally increased accordingly. Therefore, the development of new energy vehicles has driven the development of lithium battery copper foil, which has had an impact on the entire copper foil industry that cannot be ignored.

The development of the new energy industry has led to a huge change in the production and sales structure of copper foil products in my country. According to the Lithium Network, the production capacity of lithium battery copper foil increased from 59,000 tons in 2015 to 70,300 tons in 2016; the output share increased from 10.35% in 2013 to 20.2% in 2016. Before 2013, lithium battery copper foil was mainly used in consumer electronic products such as digital products, and then it was gradually used in power batteries, and the share gradually increased.

In lithium batteries, we believe that the consumption of copper foil is roughly 0.8-1kg/kWh. According to data from Tongguan Copper Foil, my country's lithium battery copper foil production capacity was 70,300 tons in 2016, and the total demand for lithium battery copper foil, including digital products and power batteries, will rise to 80,000 tons in 2017, with a significant supply gap. As the construction period of new lithium battery copper foil projects is relatively long, about 24 months, it is very difficult to make up for the gap, and copper foil processing fees continue to rise under the support of rigid demand.

Copper foil: processing fees continue to rise. In the first half of 2017, the average processing fee for lithium battery copper foil was about 45,000-50,000 yuan/ton. The specifications of new energy vehicles vary. We believe that the consumption per vehicle is about 0.8-1kg/kwh. According to China Battery Network, the global annual production was about 120,000 tons in 2016. Corresponding targets: Nord shares, Tongling Nonferrous Metals.

Energy Hardware 4: Magnetic Materials

The rare earth permanent magnet material used in permanent magnet motors, which are widely used in new energy vehicles, is an alloy composed of samarium and neodymium mixed with rare earth metals and transition metals (cobalt, iron, etc.), which is pressed and sintered by powder metallurgy and magnetized by magnetic field. Two raw materials can be selected: one is the rare earth samarium-cobalt with extremely high energy density but scarce reserves and expensive, and the other is neodymium iron boron with extensive resources and good processability. With the rapid development of energy-saving vehicles, the demand for low-priced and highly magnetic neodymium iron boron is growing rapidly.

According to the information Zhenghai Magnetic Materials responded to on the interactive platform, under normal circumstances, the amount of NdFeB permanent magnet materials used in a new energy commercial vehicle motor is about 5 to 10 kilograms, and the amount of NdFeB permanent magnet materials used in a new energy passenger car is about 2 kilograms. The "Energy-Saving and New Energy Vehicle Industry Development Plan (2012-2020)" plans to reach a production capacity of 2 million new energy vehicles by 2020. So we assume that the average consumption of NdFeB magnetic materials per new energy vehicle is 2.5 kg, and the demand for magnetic materials will reach 5,000 tons by 2020. According to estimates by Asian Metal, the domestic production of NdFeB magnetic materials in 2016 was less than 90,000 tons. Assuming that the annual production in 2020 remains unchanged, the consumption of 5,000 tons of magnetic materials for new energy vehicles will account for about 5.6% of the total domestic production.

Magnetic materials (praseodymium, neodymium and terbium): the lowest metal variety, with a price drop of more than 60% from the high. The supply-side crackdown continues, and demand gradually affects the upward trend of prices. In the first half of 2017, the average price of praseodymium-neodymium oxide was about 380,000 yuan/ton. The specifications of new energy vehicles vary. We believe that the consumption per vehicle is about: 2.5 kg of neodymium iron boron. According to China Ferroalloy Network, the global annual production of neodymium iron boron in 2016 was about 110,000 tons. Corresponding targets: Northern Rare Earth, Zhongke Sanhuan, Zhenghai Magnetic Materials.

Energy Hardware 5: Nickel Sulfate

The domestic production of nickel sulfate was about 140,000 tons before 2013. Driven by the new energy industry chain, the production has increased year by year in the past three years. In 2016, the production of nickel sulfate was nearly 200,000 tons, and the current annualized growth rate is about 25%. In terms of downstream demand, 60% of nickel sulfate is used to produce ternary precursors and ternary materials, and 40% of the demand is for traditional electronic components. We estimate that the current consumption of nickel sulfate per new energy vehicle is about 75 kilograms. According to the calculation of 500,000, 700,000, and 1 million new energy vehicles in 2017-2019, the new demand for nickel sulfate is 37,500, 52,500, and 75,000 tons, with huge growth potential. At present, power battery technology is developing towards higher discharge capacity and higher nickel ternary materials, so the nickel consumption of new energy vehicles will increase further in the future.

Nickel sulfate: It is still at the bottom of the market and is worth paying attention to. The average price of nickel sulfate in July 2017 was about RMB 25,000/ton; the amount per vehicle: 1kWh of 333 model corresponds to 1.02 kg, and 1kWh of NCA model corresponds to 1.94 kg. According to Asian Metal, the global annual output in 2016 was about 380,000 tons. The corresponding target is GEM.