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Increased production capacity is expected to lead to a growth trend in the supply of lithium hexafluorophosphate
In the past two years, the lithium battery industry has changed its previous state of rapid development, and its development has gradually become more rational. However, although the competition track is crowded, the industry's judgment on the long-term development of the lithium battery industry has not changed; From the supply side perspective, the capacity utilization rate was not high in the early first quarter of 2024, but the overall market improved significantly by the end of March; The market did not meet expectations in May and June, with both demand and market prices falling; From the perspective of overall demand, downstream terminal electrolyte factories maintain a strong demand and still have a strong sense of caution. Under the supply-demand game, the lithium hexafluorophosphate market is mainly oscillating at a low level.
In the second half of 2024, enterprises such as Yantai Wanhua, Ningxia Baofeng, and Sentian New Energy have plans to start production, and it is expected that the production capacity of lithium hexafluorophosphate will continue to increase. Of course, the golden September and silver October are the peak seasons for downstream electrolyte demand, and overall demand is expected to improve. With the premise of both supply and demand increasing, the market price of lithium hexafluorophosphate may have a certain degree of recovery and improvement.
Part 1: Review and Analysis of Lithium Hexafluorophosphate Industry
1. Insufficient market demand support in the first half of the year, with prices rising first and then falling
In the first half of 2024, the Chinese lithium hexafluorophosphate market showed a trend of first rising and then falling. In the first quarter, due to weak terminal demand, reduced procurement volume, and low prices of lithium carbonate, the trading center of lithium hexafluorophosphate fell to the lowest level in recent years. In the second quarter, with the rebound of lithium carbonate prices, coupled with the positive driving force of terminal demand in April, lithium hexafluorophosphate stopped falling and rebounded, and the price was able to rebound. In June, the price continued to fluctuate downward, with a significant decline.
In January and February, which coincided with the early stage of the Spring Festival holiday, the performance of terminal orders was flat. Small and medium-sized enterprises entered the holiday ahead of schedule, and the industry's capacity utilization rate continued to be low. Mainstream delivery of long-term contract orders mainly consumed inventory, and market prices continued to be weak; Starting from March, downstream battery cell factories gradually resumed production, the order situation gradually improved, demand gradually increased, and prices rebounded; However, the improvement in demand is not long-lasting, and the downstream terminal power market demand is still lower than expected. Market prices have also declined due to the continuous decline in demand and raw material lithium carbonate.
2. The supply increased in the first half of the year, and the competition in the lithium hexafluorophosphate market became more intense
In recent years, with the rapid development of new energy, the production capacity of electrolyte raw materials has also significantly increased with the growth of demand. Lithium hexafluorophosphate, as a solute in electrolytes, occupies an important position in electrolytes. Therefore, the production capacity of lithium hexafluorophosphate has grown rapidly. However, with the overall electrolyte industry chain showing an oversupply pattern, the pace of expansion and new projects is gradually slowing down. As of now, the production capacity of lithium hexafluorophosphate is 437300 tons per year. The production of lithium hexafluorophosphate in the first quarter was lower than expected, and the production growth rate in the second quarter was significant. Due to the impact of the Spring Festival holiday in January and February, some factories have started to shut down one after another, and downstream electrolyte orders have limited support, resulting in a decline in production; In March, some lithium hexafluorophosphate enterprises resumed work and production, and the demand side was also able to recover. Therefore, the capacity utilization rate in the industry began to rise, and the output increased significantly; In May and June, the factory still maintained a long-term contract based shipping method, producing on a per order basis. However, due to the transmission from the terminal, the demand for electrolytes in the market decreased, resulting in a decline in production.
3. Limited support from the demand side in the first half of the year, making it difficult to find favorable market conditions
In the first half of 2024, China's total electrolyte production was 540300 tons, a year-on-year increase of 22.96%, with an average monthly output of 90100 tons. From the perspective of production changes, the peak of production in the first half of the year occurred in April, with production approaching 110000 tons; 1. The Spring Festival holiday in February had a weak impact on demand, and some companies suspended work and took a break, resulting in low enthusiasm for work and limited output release. Since March, with the recovery of terminal demand, the increase in production of battery cell factories has led to an improvement in the capacity utilization rate of electrolyte enterprises, resulting in an increase in output. However, the demand growth rate was lower than expected. After two months of growth in March and April, the weak performance of the demand side in May and June led to a slowdown in production growth and a slight decline.
4. The profit inversion in the lithium hexafluorophosphate industry is obvious, and the market mentality is average
In the first half of the year, due to the low price of lithium hexafluorophosphate, there was a continuous phenomenon of profit inversion. In the second quarter, with the recovery of demand, the profit margin slightly increased on the basis of inversion. In January 2024, coinciding with the early stage of the Spring Festival holiday, a partial reduction in downstream orders led to a relatively low price of lithium hexafluorophosphate. Coupled with the impact of the low ending price of raw material lithium carbonate in January, the overall profit for the month was significantly inverted; In February, the growth rate of the supply side was still higher than that of the demand side, resulting in a state of oversupply in the market. The spot market competition was fierce, and market prices continued to decline slightly. However, the prices of lithium fluoride and anhydrous hydrofluoric acid on the raw material side both showed a downward trend, so the overall profit margin has rebounded; In March, the price of upstream lithium carbonate began to rise, with increased cost support and a gradual recovery in downstream electrolyte demand. The atmosphere in the spot market for lithium hexafluorophosphate improved, with market prices increasing and profits continuing to recover; In April, the overall demand in the industry was still acceptable, but the price of lithium carbonate on the cost side fluctuated and the market price increased. However, the increase in anhydrous hydrofluoric acid was significant, and profits remained inverted; 5. In June, the market price of lithium hexafluorophosphate on the cost side also showed a downward trend driven by the gradual reduction of lithium carbonate. The demand for lithium hexafluorophosphate slightly decreased, showing an oversupply state, and profits continued to shrink.
Part 2: Analysis and Forecast of Lithium Hexafluorophosphate Industry in the Second Half of the Year
1. Capacity increase, supply side expected to show growth trend
In the second half of the year, it is expected that downstream demand will fluctuate slightly in July. However, due to the fluctuation of raw material prices, downstream procurement will be cautious, and the overall focus will be on digesting previous spot inventory, resulting in limited fluctuations in production capacity utilization in July compared to June; In August, as downstream production slowly increased, the market saw an increase in orders for lithium hexafluorophosphate, resulting in a month on month increase in production capacity and capacity utilization rate; September and October are the traditional peak season for new energy, and terminal demand may be further released, increasing the demand for raw materials. With strong support from demand, it is expected that production will increase significantly month on month, and capacity utilization will also increase; In November and December, it is expected that terminal consumption inventory will be the main factor, and downstream electrolyte demand will also be relatively weak. Although production capacity will be concentrated at the end of the year, due to the construction of new projects, the scale of production capacity will increase. However, the output will be in the stage of increasing quantity, resulting in a lower utilization rate of lithium hexafluorophosphate production in the future.
2. Expected increase in downstream electrolyte and terminal demand in the second half of the year
At present, the market heat of the new energy industry is not decreasing. With the expansion of new equipment in the second half of the year, the output will show an increasing trend. It is expected that the electrolyte production in the second half of 2024 will be around 590000 tons. The production of facilities in the second half of 2024 is relatively concentrated, and the operating rate is expected to increase due to the impact of the peak demand season. At present, the terminal production schedule in July and August is average, and although demand is running well, the growth rate of demand is not significant. 9. The traditional peak season of the industry is approaching in October, and with the support of a smooth recovery in demand, production may reach its peak this year. In November and December, during the peak period of new energy vehicle consumption, terminal consumption inventory is the main factor, and electrolyte production begins to decrease; Overall, there is an expected increase in electrolyte demand in the second half of the year.
3. The lithium hexafluorophosphate market is expected to rise first and then fall in the second half of the year
In the second half of 2024, enterprises such as Yantai Wanhua, Ningxia Baofeng, and Sentian New Energy have plans to start production, and it is expected that the production capacity of lithium hexafluorophosphate will continue to increase. Of course, the golden September and silver October are the peak seasons for downstream electrolyte demand, and overall demand is expected to improve. With the premise of both supply and demand increasing, the market price of lithium hexafluorophosphate may have a certain degree of recovery and improvement.
Part 1: Review and Analysis of Lithium Hexafluorophosphate Industry
1. Insufficient market demand support in the first half of the year, with prices rising first and then falling
In the first half of 2024, the Chinese lithium hexafluorophosphate market showed a trend of first rising and then falling. In the first quarter, due to weak terminal demand, reduced procurement volume, and low prices of lithium carbonate, the trading center of lithium hexafluorophosphate fell to the lowest level in recent years. In the second quarter, with the rebound of lithium carbonate prices, coupled with the positive driving force of terminal demand in April, lithium hexafluorophosphate stopped falling and rebounded, and the price was able to rebound. In June, the price continued to fluctuate downward, with a significant decline.
In January and February, which coincided with the early stage of the Spring Festival holiday, the performance of terminal orders was flat. Small and medium-sized enterprises entered the holiday ahead of schedule, and the industry's capacity utilization rate continued to be low. Mainstream delivery of long-term contract orders mainly consumed inventory, and market prices continued to be weak; Starting from March, downstream battery cell factories gradually resumed production, the order situation gradually improved, demand gradually increased, and prices rebounded; However, the improvement in demand is not long-lasting, and the downstream terminal power market demand is still lower than expected. Market prices have also declined due to the continuous decline in demand and raw material lithium carbonate.
2. The supply increased in the first half of the year, and the competition in the lithium hexafluorophosphate market became more intense
In recent years, with the rapid development of new energy, the production capacity of electrolyte raw materials has also significantly increased with the growth of demand. Lithium hexafluorophosphate, as a solute in electrolytes, occupies an important position in electrolytes. Therefore, the production capacity of lithium hexafluorophosphate has grown rapidly. However, with the overall electrolyte industry chain showing an oversupply pattern, the pace of expansion and new projects is gradually slowing down. As of now, the production capacity of lithium hexafluorophosphate is 437300 tons per year. The production of lithium hexafluorophosphate in the first quarter was lower than expected, and the production growth rate in the second quarter was significant. Due to the impact of the Spring Festival holiday in January and February, some factories have started to shut down one after another, and downstream electrolyte orders have limited support, resulting in a decline in production; In March, some lithium hexafluorophosphate enterprises resumed work and production, and the demand side was also able to recover. Therefore, the capacity utilization rate in the industry began to rise, and the output increased significantly; In May and June, the factory still maintained a long-term contract based shipping method, producing on a per order basis. However, due to the transmission from the terminal, the demand for electrolytes in the market decreased, resulting in a decline in production.
3. Limited support from the demand side in the first half of the year, making it difficult to find favorable market conditions
In the first half of 2024, China's total electrolyte production was 540300 tons, a year-on-year increase of 22.96%, with an average monthly output of 90100 tons. From the perspective of production changes, the peak of production in the first half of the year occurred in April, with production approaching 110000 tons; 1. The Spring Festival holiday in February had a weak impact on demand, and some companies suspended work and took a break, resulting in low enthusiasm for work and limited output release. Since March, with the recovery of terminal demand, the increase in production of battery cell factories has led to an improvement in the capacity utilization rate of electrolyte enterprises, resulting in an increase in output. However, the demand growth rate was lower than expected. After two months of growth in March and April, the weak performance of the demand side in May and June led to a slowdown in production growth and a slight decline.
4. The profit inversion in the lithium hexafluorophosphate industry is obvious, and the market mentality is average
In the first half of the year, due to the low price of lithium hexafluorophosphate, there was a continuous phenomenon of profit inversion. In the second quarter, with the recovery of demand, the profit margin slightly increased on the basis of inversion. In January 2024, coinciding with the early stage of the Spring Festival holiday, a partial reduction in downstream orders led to a relatively low price of lithium hexafluorophosphate. Coupled with the impact of the low ending price of raw material lithium carbonate in January, the overall profit for the month was significantly inverted; In February, the growth rate of the supply side was still higher than that of the demand side, resulting in a state of oversupply in the market. The spot market competition was fierce, and market prices continued to decline slightly. However, the prices of lithium fluoride and anhydrous hydrofluoric acid on the raw material side both showed a downward trend, so the overall profit margin has rebounded; In March, the price of upstream lithium carbonate began to rise, with increased cost support and a gradual recovery in downstream electrolyte demand. The atmosphere in the spot market for lithium hexafluorophosphate improved, with market prices increasing and profits continuing to recover; In April, the overall demand in the industry was still acceptable, but the price of lithium carbonate on the cost side fluctuated and the market price increased. However, the increase in anhydrous hydrofluoric acid was significant, and profits remained inverted; 5. In June, the market price of lithium hexafluorophosphate on the cost side also showed a downward trend driven by the gradual reduction of lithium carbonate. The demand for lithium hexafluorophosphate slightly decreased, showing an oversupply state, and profits continued to shrink.
Part 2: Analysis and Forecast of Lithium Hexafluorophosphate Industry in the Second Half of the Year
1. Capacity increase, supply side expected to show growth trend
In the second half of the year, it is expected that downstream demand will fluctuate slightly in July. However, due to the fluctuation of raw material prices, downstream procurement will be cautious, and the overall focus will be on digesting previous spot inventory, resulting in limited fluctuations in production capacity utilization in July compared to June; In August, as downstream production slowly increased, the market saw an increase in orders for lithium hexafluorophosphate, resulting in a month on month increase in production capacity and capacity utilization rate; September and October are the traditional peak season for new energy, and terminal demand may be further released, increasing the demand for raw materials. With strong support from demand, it is expected that production will increase significantly month on month, and capacity utilization will also increase; In November and December, it is expected that terminal consumption inventory will be the main factor, and downstream electrolyte demand will also be relatively weak. Although production capacity will be concentrated at the end of the year, due to the construction of new projects, the scale of production capacity will increase. However, the output will be in the stage of increasing quantity, resulting in a lower utilization rate of lithium hexafluorophosphate production in the future.
2. Expected increase in downstream electrolyte and terminal demand in the second half of the year
At present, the market heat of the new energy industry is not decreasing. With the expansion of new equipment in the second half of the year, the output will show an increasing trend. It is expected that the electrolyte production in the second half of 2024 will be around 590000 tons. The production of facilities in the second half of 2024 is relatively concentrated, and the operating rate is expected to increase due to the impact of the peak demand season. At present, the terminal production schedule in July and August is average, and although demand is running well, the growth rate of demand is not significant. 9. The traditional peak season of the industry is approaching in October, and with the support of a smooth recovery in demand, production may reach its peak this year. In November and December, during the peak period of new energy vehicle consumption, terminal consumption inventory is the main factor, and electrolyte production begins to decrease; Overall, there is an expected increase in electrolyte demand in the second half of the year.
3. The lithium hexafluorophosphate market is expected to rise first and then fall in the second half of the year
After experiencing a trend of first rising and then falling in the first half of the year, lithium hexafluorophosphate gradually weakened and stabilized in May and June; Under the pattern of oversupply, it has been established that the market price of lithium hexafluorophosphate will not experience significant changes, but will gradually stabilize; The expected price fluctuation of lithium hexafluorophosphate in China in the second half of 2024 is still relatively small, and the market may continue the weak stable trend of May and June to a certain extent in July. Some factories are operating with the goal of clearing spot goods, and the supply and demand are weak, making it difficult for prices to significantly increase in the short term; There is expected to be some consumption of inventory in the spot market in August, coupled with a slight increase in demand in August, and it is expected that market prices will rise narrowly in August; With the arrival of the traditional peak season of Golden September and Silver October, it is expected that there will be a certain increase in terminal demand, and the supply may also show a growth trend. It is expected that market prices will rise; From November to December, lithium hexafluorophosphate may experience a slight decline in operation after experiencing the impact of gold and silver.
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