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Global Lithium Industry Pattern Analysis: China's Rapid Development

Mar 05, 2018

Talking about the basic pattern of lithium industry in the world, we first think of the strategic situation of China, Japan and Korea tripod. As for the formation of this basic strategic pattern, and the world's most powerful lithium-ion research in the United States why the lithium industry has not been developed, and so on many readers are not very clear. And the development trend of the international lithium industry pattern, it is the problem that many colleagues of lithium are concerned about. Today small make up for everyone in the three countries of China, Japan, Korea, the development of lithium.

China's lithium battery industry is developing rapidly with global competitive opportunities

Before 2015, China's lithium battery market is mainly consumer lithium batteries, and occupies an absolute dominant position. Since 2015, China's lithium battery industry structure has changed significantly, dynamic lithium battery demand for rapid growth, 2016 power-type lithium battery market accounted for 52%, the first breakthrough 50% and more than consumption lithium battery, and 2015 only 47%; Consumption lithium ion battery market share continued to decline, In 2016, about 42%, 2014 and 2015 accounted for 83% and 48% respectively; the application of energy storage lithium battery in the field of PV distributed Application and mobile communication base station has been expanding, and the 2016 ratio has reached 6%.

Led by power Lithium battery, the production of lithium battery in China showed a high growth trend again in 2016. According to data from the National Bureau of Statistics, 2016 China's lithium battery cumulative production reached 7.84 billion, an increase of 40%, the growth rate of 2010 years since the new highs. 2016 China's lithium battery industry reached 128 billion yuan, the first breakthrough 100 billion yuan, an increase of 30% per cent, continued to maintain a rapid growth situation. In 2016, China accounted for 40% of the global lithium-ion battery industry, a 5% increase from 2015.

In the new Energy vehicle production and marketing, the second half of 2015 China's lithium-ion power battery capacity to enter the "Great Leap Forward", a large number of social capital poured in. According to incomplete statistics, 2016 China's related enterprises built lithium-ion power battery production capacity reached 100-130gwh/a, to 2017 China's power battery production close to 200gwh/years, the rapid growth of power battery capacity, will significantly boost the upstream lithium material industry scale, The demand for key materials will be greatly increased.

At present, China's lithium-ion enterprises are constantly pouring into the international line, some materials enterprises have become one of the world's leading. In the long run, the new energy vehicle will become China's important industry in the next few years, China's material enterprises are expected to rely on the huge domestic market space, speed up the pace of development, usher in global competition opportunities.

The decline of the lithium industry in Japan

Nissan's move to sell AESC shares marks a total loss of value for money in the Japanese power battery industry. Japan's high-end lithium-ion strategy has been with the current global lithium industry development phase out of tune.

The world's first lithium-ion battery was the first volume produced by Sony in 1991, and it also laid the dominant position of the world's lithium industries. Supposedly, America is the pioneer of global lithium-ion basic research, and almost all electrode materials were first reported or invented by Americans, but why hasn't the U.S. been able to produce lithium batteries in the first place, and so far the U.S. battery industry has been lackluster?

In fact, similar to the United States "for others to marry clothes" example is not only in the lithium-ion industry, in other areas there are many similar cases. The author wants to say that the Americans have the spirit of innovation, there is the first industrialization of the momentum and success, but the lack of fine carved chisel will be the industry perfect patience. And the lithium industry is precisely such a typical example.

The lithium-ion industry, which was born in Japan in 1991, could be described as a high-tech industry in the 15-year period until 2005 (in the broad sense of high technology rather than in the narrow sense), and Japanese companies have made huge profits from monopolies in technology and markets. After 2000, with the lithium technology spread to China and Korea, the low-end market is gradually eroded by China and Korea, but this period of the lithium industry Japan has little impact.

And 2005 years later, the mid-end market is gradually occupied by South Korea, the overall profits of the lithium industry in Japan, rapid decline, resulting in a number of enterprises have been operating difficulties. In response to this situation, on the one hand, Japanese materials and battery companies have to invest in China to set up factories to transfer low-end capacity in China, hoping to reduce operating costs.

On the other hand, the Japanese battery industry has carried out a number of mergers and acquisitions and restructuring, the number of batteries enterprises reduced to five or six. But overall effect is very little, the Japanese lithium industry in recent years has become more and more obvious, and the trend of irreversible. In my personal opinion, this is mainly due to the following reasons:

1 Japanese business style is generally conservative. In order to reduce the cost of manufacturing enterprises, the Japanese lithium enterprises in China set up factories generally earlier than in Korea, and both in materials and batteries are involved. such as Mitsubishi Chemical (MCC), Asahi-Mei Chemical (AGC Seimi Chemical), Yutong hing Production (UBE), Mitsui Chemistry (Mitsui Chem.), JFE Chemistry, Hitachi Chemical (Hitachi Chem.), SONY and Panasonic and so on.

But if we analyze the case of the Japanese lithium-ion companies, we will find that they are generally conservative, such as the negative companies only put the back-end process in China, plainly, just to get China cheap graphite resources and beware of technology into China. The positive enterprise is only to transfer some low-end technology and production capacity without involving high-end products and processes, the electric core plant generally only produces low-end da Lu Huo.

The Japanese battery industry believes that the only way to do so will not cause the leakage of technology, the extreme example is the Japanese batteries manufacturing equipment enterprises have never set up factories in China. At the same time, the localization of Japanese enterprises in China is not enough, and the lack of in-depth communication with domestic enterprises and industrial chain, leading to their product positioning and prices are generally relatively high, can only meet some high-end demand, and in the low-end market is not favored.

In my personal opinion, these relatively conservative measures can not effectively reduce the operating costs of Japanese companies. With the Japanese generally conservative mentality coupled with the worsening and irreversible Sino-Japanese relations, the author of the Japanese lithium industry in China's development prospects are not optimistic, even ATL is eager to set up Catl and Japanese-funded background.

2 Japan is a very closed Island society, some business models, marketing ideas and ways of thinking outsiders difficult to understand. Japan's battery factory, for example, has an absolute priority to buy raw materials produced by its own companies, even if it is far less cost-effective than similar products in other countries, a stark contrast to Samsung SDI and LG's global sourcing strategy for raw materials.

This makes it difficult for foreign raw materials companies to survive in Japan, while Japanese battery companies themselves cannot effectively reduce costs. In addition, because the commercial circulation of Japan is generally more than in Europe and the United States and China and South Korea, which has increased the operating costs to a considerable extent. These issues are related to the traditional culture of Japan, which is almost impossible to change, although it seems inconceivable to outsiders.

3 for historical reasons, the Japanese lithium industry has always been the European and American markets as gods, and the huge Chinese market is not too much. In recent years, China's domestic electric vehicle market is increasingly hot, and Korean lithium enterprises in the Chinese market in sharp contrast is that a few Japanese mainstream power battery enterprises in China has not been strategic layout, only Panasonic in 2016 to invest 50 billion yen (2.7 billion yuan) in Dalian, opened the Power Battery factory ( It is expected to be built in 2017), while South Korea's Samsung SDI and LG have been put into production as early as 2015, it is enough to see Japanese enterprises in China's mentality strange.

In the Japanese lithium industry to survive the present, I am afraid only a large Chinese market can delay the decline of the Japanese lithium industry cycle. I am surprised that the Japanese battery industry has been taking a disregard of the Chinese market attitude, in fact, the Japanese themselves to crowd out the world's largest lithium market, this is actually no Zuo no die the most classic interpretation.

To be realistic, the advantage of Japanese lithium-ion enterprises lies in the technology leadership, which is difficult to overtake in the short term. So for Japanese enterprises, to maintain survival and development, it can only through continuous technological innovation in the front of Korean enterprises, in each specific technology spread (be Shanzhai) before earning enough profit, then the capital and Korean enterprises to fight price.

However, the reality is quite brutal, as the author in the previous two chapters analyzed, China and South Korea to catch up with lithium battery Japan, there is no need to surpass Japan in technological innovation. As long as China and South Korea through the Cottage + low-level duplication of construction, so that the Japanese or European and American companies to innovate technology or products to collect the cost of innovation is enough. In this way, Japanese enterprises do not continue to innovate the driving force, the pace of innovation more and more slowly and finally by China and South Korea to catch up.

As the author has analyzed, the current lithium-ion technology is in a slow and even relatively stagnant period of development. It is precisely because in this relatively special period, in the face of the rapid development of lithium industry in China and Korea, the Japanese lithium industry in 2010 after the situation more difficult, eventually led to 2016 years Sony was forced to sell their lithium business.

Although in the past few years due to the slow start of the international electric vehicle market, especially the strong demand of Tesla, to a certain extent, to alleviate the business plight of the Japanese lithium business, but the author of the Japanese lithium industry long-term development prospects remain pessimistic. Because today's lithium-ion industry has entered a mature stage, to the cost of the king to rely on cost-effective to win the era, Japan's high-end routes in China and South Korea under the squeeze must be more difficult. On the impact of cost on lithium industry, the author has discussed in detail in the third chapter.

2015, Panasonic announced the closure of Beijing Lithium battery factory and the digital battery market, which means that the Japanese lithium industry in low-end applications in the overall collapse. Another is in high-end electric vehicle applications, as the world's largest sales of the pure electric vehicle Nissan Leaf announced that the next generation will use South Korea's LG chemical lithium-ion power battery, rather than Nissan and NEC joint venture Aesc. Both events, in my opinion, are the most serious warnings of the decline of the Japanese lithium industry.

In the second half of 2016, the real symbol of the Japanese battery industry was a total recession, Sony sold its lithium-ion division to the Japanese Springfield production company, and Nissan's 51% per cent of its holdings of Aesc in June 2017 to 1 billion U.S. dollars to China's Jinsha capital. Sony's decline is, of course, with its excessive focus on the 3C field and ignore the development of the Power Battery has a direct relationship, but if we put in the international lithium industry background, the loss of Sony is in fact the entire Japanese lithium industry recession in miniature.

In my opinion, Nissan's move to sell AESC shares marks a total loss of value for money in the Japanese power battery industry. As I have analyzed in the previous three chapters, Japan's high-end lithium-ion strategy has been incompatible with the current global lithium industry development phase.

An indisputable fact is that since 2005, the international market share of Japanese lithium battery has been declining, the 2016 Japanese lithium battery global market share has dropped to about 15%, the speed of its decline is alarming. If we stand in the economic globalization angle, the current predicament of Japan's lithium-ion industry actually marks a rapid decline in the competitiveness of Japanese manufacturing enterprises leading a wave of the times and the direction of development, while the rapid rise of China's economy has undoubtedly accelerated the process.

The rise of lithium-ion industry in Korea

Korea's lithium industry started nearly 10 years later than Japan, at the end of the last century, Korea almost with China began to develop lithium industry, to 2005 years, Japan, Korea and China's lithium industry tripod the potential of the basic formation. But Korea's lithium industry came from behind, in the global power battery market gongchenglvede, tentacles have been all over the world every corner, and the world's top-ranked car manufacturers have extensive cooperation.

At present, South Korea not only fully occupy the midrange market, but also in the high-end sector has greatly eroded Japan's inherent market, the Korean lithium has been developing very rapidly over the past few years. In the author's opinion, the rapid development of Korea's lithium industry is mainly due to the following reasons:

1 and China decades ago followed the United States vigorously develop lithium iron phosphate power Battery Technical route The difference is that South Korea follows Japan in its business and technical route. Of course, it has a lot to do with the Korean politics/culture and the many core technical and managerial staff of Samsung SDI, LG and SK.

This makes the Korean lithium industry in the past few years in the technical route or management has not gone many detours, so that the full use of "after the advantage." But in our country, we vigorously develop the technology line of lithium iron phosphate battery, which leads to the huge waste of manpower, financial resources and resource, which lead to the current level of lithium battery at least three years behind Korea.

2 Korean government has for many years been in policy and funding to support Samsung SDI and LG (later SK joined) three leading enterprises to seize the world's first lithium ion battery goal.

In the Government's support and coordination, the Korean lithium battery industry concentration is very high entirely by the Samsung SDI, LG Chemical and SK three giants monopoly, forming a more benign competition and cooperative relations, and jointly promote the development of the industry. In the past ten years, China's two hundred or three hundred lithium-ion enterprises have sprung up all over the country, which is obviously not beneficial to the improvement of the overall industrial level of our lithium-ion industry.

Korea Lithium industry rapid development in addition to follow Japan less detours, another fundamental reason is that the Korean battery companies have a good grasp of the finished product quality and cost balance. In contrast to the production cost reduction of semi artificial semi mechanical production in Chinese enterprises, Korean enterprises rely on manufacturing automation to reduce manufacturing costs first. Thanks to its geographical location and close economic and trade relations, Korean companies are often able to clone Japanese battery production equipment at a lower cost in the shortest possible time.

When the enterprise was forced to follow up, efforts to reduce equipment costs to reduce the price of lithium-ion batteries, South Korean companies began to buy China's positive and negative materials to further reduce the cost of lithium-ion battery manufacturing. The strategy began in 2008 with the purchase of positive materials for the technology, which later expanded to several of the country's leading cathode manufacturers.

As a result of the export tax rebate, Korean battery companies can even get less than China's domestic prices, which for Samsung SDI and LG in the past few years the rapid expansion of international market share played a decisive role, and this strategy is not expected by Japanese companies.

Japanese companies are thinking more about reducing costs by relying on technological innovations such as material improvements or replacements, such as replacing cobalt-acid lithium with NMC (LCO), which now appears to be not ideal, and the market's response does not fully endorse the Japanese mentality.