According to experts, China’s output of ternary precursors was 446,000 tons, a year-on-year increase of 34%. Two leading companies announced the supply of ternary precursor products for battery materials to Tesla.
Huayou Cobalt said that the company’s holding subsidiaries Huayou New Energy Technology Co., Ltd. and Huayou Co., Ltd. signed an agreement with Tesla. The agreement stipulates that the company intends to supply ternary precursor products of battery materials to Tesla. Huayou Cobalt also said that the company regards the new energy lithium battery material industry as its core business for key development.
The signing of the supply framework agreement further strengthens the company’s competitiveness in the field of new energy lithium battery materials, and is expected to have a positive impact on the company’s operating performance from 2022 to 2025. Cngr also said in the announcement that the company signed a contract with Tesla. The contract stipulates that the company will supply ternary precursor products of battery materials to Tesla.
1. Both Huayou and Cngr are ternary precursor leaders
Huayou Cobalt is mainly engaged in the R&D and manufacturing of new energy lithium battery materials and cobalt new material products. The company’s ternary precursors and lithium battery cathode material products have entered the core industries of global leading power batteries such as CATL, BYD, LG New Energy, and SK. chain.
As one of the main suppliers of ternary precursor products for lithium batteries in China, from 2019 to 2021, Huayou Cobalt’s ternary precursor operating income will be 1.1 billion RMB, 2.5 billion RMB, and 5.7 billion RMB, increasing year by year.
In 2021, Huayou Cobalt produced a total of 65,406 tons of precursors, a year-on-year increase of 88.44%; the annual sales of precursors totaled 59,112 tons, a year-on-year increase of 77.41%. Huayou said that ternary precursor products are mainly prepared through synthesis, washing, drying and other processes; the customers of ternary precursors are lithium battery cathode material manufacturers, which mainly adopt the direct sales model.
Previously, Huayou Cobalt said in an investigation by an investment institution that the company has developed and mass-produced a variety of 8-series and 9-series precursors, and reserves a variety of new high-nickel and NCMA precursor products. At present, the company has and is building ternary precursor capacity. 325,000 tons (including joint ventures), the production and sales scale and technology development capabilities are at the forefront of the industry.
Cngr is a professional comprehensive service provider of new energy materials for lithium batteries. It has reached strategic cooperation with dozens of well-known companies at home and abroad. In 2020 and 2021, the shipments and exports of ternary precursors will rank first in the world for two consecutive years.
2. Cngr has expanded the production of ternary precursors many times
Cngr has issued an announcement saying that the company signed an investment contract with the Qinzhou Municipal Government. The total investment of the project is about 23 billion RMB, mainly engaged in the development of ternary precursors, cobalt tetroxide and other precursors, as well as the comprehensive recycling of metal nickel cobalt and battery materials.
The first phase of the project has an investment of about 10 billion RMB, and it mainly builds an annual output of 150,000 tons of precursors and 70,000 tons of metal nickel-cobalt and its comprehensive recycling facilities.
After that, the company built a new energy global R&D base in Ningxiang, with an annual output of 35,000 tons of lithium battery precursor materials and supporting nickel-cobalt resources and battery recycling projects, with a total investment of about 1.3 billion RMB.
Immediately afterwards, Cngr plans to issue shares to specific objects and raise no more than 5 billion RMB to invest in an industrial base of Guangxi Cngr New Energy Technology Co., Ltd. Among them, Guangxi Cngr New Energy Technology Co., Ltd. plans to invest 5.99 billion RMB in projects, plans to use 3.5 billion RMB of raised funds, and the project design ternary precursor production capacity is 180,000 tons/year.
This year, Cngr signed an agreement with Berterry. The two parties will carry out multi-level and all-round strategic cooperation in the fields of precursor product development, precursor product supply, overseas mineral resource development and material production capacity layout. It has also reached a cooperation with Ruipu. Cngr will provide raw material supply guarantee for Ruipu. It is expected that from 2022 to 2030, Ruipu will purchase ternary precursors and iron phosphate products from Cngr. The total amount will reach 800,000 tons to 1 million tons.
Benefiting from the improved terminal demand in the new energy industry and the effective enhancement of supply and demand in the industrial chain, Cngr estimates that the net profit attributable to shareholders of listed companies in the first half of this year is 650 million to 680 million RMB, an increase of 33.23% to 39.38% over the same period of the previous year. From January to June this year, the total sales volume of Cngr ternary precursor and cobalt tetroxide exceeded 100,000 tons.
By the end of 2021, Cngr has formed a ternary precursor production capacity of about 200,000 tons per year, and it is expected that the company’s precursor production capacity will exceed 500,000 tons by 2023.
3. Many companies expand production of ternary precursors
Ternary precursor refers to the co-precipitated compound of nickel, cobalt, manganese (aluminum) hydroxide, which is the main raw material for the production of ternary positive electrode material, and its value can account for more than half of the value of ternary positive electrode material.
Data show that in the first half of 2022, China’s total output of ternary precursors was 359,000 tons, a year-on-year increase of 97%. It is estimated that in the second half of the year, the output of ternary precursors in China is 446,000 tons, a year-on-year increase of 34%.
Therefore, many companies have invested in ternary precursors. Since this year alone, Fangyuan, Pawa, etc. have expanded production in this field or announced the latest achievements.
Fangyuan Co., Ltd. announced that the company has signed an agreement with Feinan Resources and Chaocheng Investment. The parties plan to carry out all-round cooperation around the ternary cathode material precursor business and jointly fund the establishment of a project company. The total investment is tentatively set at RMB 1 billion. The registered capital is RMB 300 million.
Pawa also plans to raise funds of 1.509 billion RMB, mainly for the annual production of 40,000 tons of ternary precursor projects and to supplement working capital.
GEM announced that the company held the first mass production and delivery ceremony of the latest generation of concentration gradient ultra-high nickel and low cobalt core-shell ternary precursors. GEM said that the latest generation of concentration gradient ultra-high nickel core-shell ternary precursors was officially launched, marking the start of mass production of the company’s latest generation of concentration gradient ultra-high nickel core-shell ternary precursors, and the company became the world’s largest mass production concentration gradient ultra-high Few companies of high nickel core-shell ternary precursors.
Lopal announced that the company plans to change the original investment project to ternary cathode material precursor and other projects, and increase the investment to 1.5 billion RMB.
Xtc and GEM also stated that the two parties signed a new generation of ternary precursor cooperation agreement, and agreed that the total supply and demand in the next five years is expected to be 455,000-540,000 tons.
At the same time as the head enterprises are expanding production, the problem of overcapacity in the ternary precursor has been revealed. Experts pointed out that due to the deep binding of leading enterprise customers, the large amount of upstream nickel-cobalt resources locked, the high capacity utilization rate and low cost, it is expected that the future of the track will intensify and the concentration will be further enhanced.