In China, the development of alternative energy vehicles and the Li-ion battery sector are booming with the support of promotional policies from the Chinese government, according to new report from CCM, a leading market intelligence provider for China’s agriculture, chemicals, food & ingredients and life science markets. In May 2016 alone, nearly RMB2.6 billion (US$400 million) flowed into the Li-ion battery market, with Tianqi Lithium, Ganfeng Lithium and GEM CO., Ltd. putting in the most capital.
Over the past five years, the growth of electrochemical energy storage market in China has outpaced that of the global market, with a CAGR (2010-2015) of 110%—six times as high as that of the global. Among it, the installed capacity of Li-ion battery captured 66% of the market share in the electrochemical energy storage market.
In 2014, China produced 5.43 billion Li-ion batteries, with a CAGR of around 40% and accounting for about 70% of the total output in the global, according to CCM’s new report Market and Development Trend of Li-ion Battery in China, 2016-2020.
|The rapid development of alternative energy vehicles in China has driven the development of the power Li-ion battery and its upstream industry. The power Li-ion battery industry and related industries have become cash cows.|
The output of Li-ion battery exceeded 5 million for the first time in 2014 and reached 5.6 million in 2015, up by 3.13% year-in-year. As for the capacity, in 2015, the domestic output of power Li-ion battery increased to 15.7 GWh, triple than that of the last year.
With the price of upstream raw materials increasing coupled with rising sales volume of the downstream products, most listed Li-ion battery companies have recorded great growth in both its revenues and net profits, CCM said.
On 18 May, the Shanghai index closed at 2850.93, up 0.84%, with the trading volume of RMB 126.8 billion (US$19.4 billion). Though the index was still around 2850, the shares of Li-ion battery were rebounding. The Li-ion battery index has kept rising for three days, up 9%.
Major global battery suppliers have been keeping pace and speeding up bolstering their investments in China’s Li-ion industry. Nearly 80% of new investment worldwide in Li-on batteries was located in China in 2014, according to CCM. There were 25 Li-ion battery projects in China with the scale of investment above RMB100 million (US$15 million). Multinational enterprises such as Samsung SDI and LG Chem are active in developing Li-ion batteries in China.
On 13 April 2016, Samsung SDI, a subsidiary of Samsung Group, announced it would exit the fuel cell market to focus on developing its Li-ion business. In 2015, Samsung SDI invested KRW682.2 billion (US$580 million) in both battery and fuel cell development, the majority (KRW528.8 billion / US$450 million) for batteries.
This year, Samsung SDI has said it will keep investing in its current manufacturing infrastructure and construct new manufacturing infrastructure in Europe.
Currently, the annual capacity of Samsung SDI’s li-ion battery factories in Ulsan, Korea and Xi’an, China could meet the need of 200,000 alternative energy vehicles.
This year, Samsung said it will boost its investment in Li-ion batteries by 40% compared to that in 2015. Cho Nam Seong, president of Samsung SDI, said that by 2020, the company will invest more than KRW3 trillion (US$2.5 billion) in the Li-ion battery industry.
Ningbo Shanshan Co., Ltd. (Shanshan Corporation) was listed in Shanghai Stock Exchange in 1996. It covers three main businesses including clothing, Li-ion battery materials and investments.
Shanshan Corporation was the first batch of enterprises to enter the Li-ion battery material market. Owning six manufacturing enterprises and one institute, Shanshan Corporation has become China’s biggest and world’s top three supplier of Li-ion battery material, CCM said.
According to the company’s 2015 annual report, the net profit was RMB665 million (US$102 million), up 90.81% YoY; the annual revenue was RMB4.302 billion (US$660 million), up 17.58% YoY.
The rapid increase on the net profits was mainly attributed to the rising profits from their main business, especially the increasing price of cathode material in the fourth quarter. Shanshan Corporation covers almost the whole industrial chain of Li-ion battery: cathode materials, anode materials, electrolyte, and separators.