Based on the high growth of the upstream core raw material market demand in the new energy era, and the need to seek capital expenditure transformation to break the operating bottleneck in the context of carbon neutrality, various leading traditional chemical companies have recently entered the new energy material track. Judging from the current situation, the phosphorus chemical industry may be the first sub-industry to enter the downstream lithium iron phosphate track as a whole.
Phosphate ore at the top of the industrial chain is a world-class strategic resource. Due to its scarcity and non-renewable characteristics, global supply continues to shrink. As the world's largest producer of phosphate rock and the second largest country with phosphate rock reserves, my country's phosphate rock output in 2020 has fallen by nearly 40% compared with 2016, and the gap between phosphate rock supply and demand has significantly narrowed and entered a state of tight balance.
While the demand for phosphate rock and monoammonium phosphate for terminal applications such as pesticides and fertilizers remains at a rigid level all year round, the strong growth in demand for lithium iron phosphate will make the demand for phosphate rock several times or even dozens of times in the future. It is estimated that by 2025, my country’s demand for lithium iron phosphate for phosphate ore will grow to 3.7 million tons, with a compound growth rate of more than 60% from 2021 to 2025. This will in turn cause the phosphate rock supply and demand structure to gradually change from a tight balance to a short supply. By then, the pressure on the cost of phosphorus in lithium iron phosphate will further increase, and lithium iron phosphate manufacturers with upstream raw material plans will obtain greater profit margins.
The upstream leading companies plan the production capacity of lithium iron phosphate and related materials downstream, which may lead to drastic changes in the industry structure: we believe that the future industry will be deduced into two models:
1. In-depth binding of midstream companies and upstream companies to complement each other's advantages;
2. Upstream companies independently carry out lithium iron phosphate business. Lithium iron phosphate manufacturers have begun to build factories in Yunnan, Guichuan, Hubei and other phosphorous mining areas or deeply bind with upstream phosphorous chemical companies to ensure sufficient phosphorous sources in the future. Leading enterprises in upstream fields such as phosphorus chemical industry and titanium dioxide have also announced their plans to start production.
Traditional chemical industry leaders have cut into the new energy material track
Recently, many traditional chemical industry leaders have announced that they have entered the field of new energy materials. For example, Hualu Hengsheng announced that it would make DMC electrolyte, Oriental Shenghong acquired Serbon Petrochemical, and Longbai Group announced that it would deploy lithium iron phosphate and so on. First of all, why are the traditional chemical industry leaders entering the field of new energy materials one after another? There are two main reasons:
1. New energy materials may be the fastest growing track in materials in the next 10 years;
2. Subject to the requirements of carbon peak and carbon neutrality, the capital expenditure of traditional chemical industry leaders must be shifted. Traditional chemical industry leaders have used a large amount of capital expenditure to form economies of scale or integrated layout to reduce costs. In 2020 The average percentage of CR5 under construction in various chemical industries is as high as 50%, and CR5 for chemical fibers and rubber products is even as high as 80%. Since the country announced the peak and carbon neutrality of carbon, leading companies have entered purely by ordinary capacity expansion. During the bottleneck period, it is difficult to continue the previous substantial capital expansion in its own industries, and capital expenditure must be shifted. Therefore, it is expected that it will shift to the downstream high-growth new energy materials industry.
Transformation Trend of Phosphorus Chemical Supply and Demand Pattern in the New Energy Era
Supply side: The global upstream phosphate rock supply and demand structure has entered a tight balance
The global distribution of phosphate rock is seriously uneven, and my country's phosphate rock reserves are the second and the output is the first. Phosphate rock is a non-renewable resource and lack of substitutes. This means that with the continuous exploitation of phosphate rock, phosphate rock resources are gradually shrinking and rapidly depleted. Therefore, countries have begun to regard phosphate rock as important. Strategic resources. It is conceivable from this that if my country continues to this speed of phosphate mining in the future, then my country's phosphate rock resources will be completely exhausted within 40 years.
With the strengthening of control efforts, my country's phosphate rock output has entered a downward range from 2016 to 2017, and the output of the main phosphate rock areas in Hubei, Guizhou, Yunnan, and Sichuan has been significantly reduced. As of 2020, the output of phosphate rock in Hubei, Guizhou, Yunnan, and Sichuan were 38281, 21.32 million, 18.075 million tons, and 8.417 million tons, respectively, which were down 26.1%, 59.4%, 19.6% and 40.1% from 2016. National phosphate rock output It was 88.933 million tons, down 4.71% year-on-year and 38.4% year-on-year. It is expected that in the future, as my country’s phosphate rock output continues to decrease, the supply and demand structure of phosphate rock is likely to be in short supply. The increasing scarcity of phosphate rock will cause the price of phosphate rock to continue to rise, which will lead to increased pressure on the cost of downstream phosphorus chemical products and lower product prices. rise.
Demand side: steady demand for phosphate fertilizer in the agricultural sector, and accelerated growth in demand for phosphate sources in the new energy sector
Pesticides and fertilizers are the main downstream end products of phosphate rock, and the demand remains stable: the end products of phosphate rock are mainly agrochemical products such as fertilizers and pesticides. To influence. As of August 20, the domestic price spread of monoammonium phosphate increased by 117.0% from the same period last year and 91.7% from the beginning of the year; the price spread of diammonium phosphate increased by 69.6% from the same period last year and 51.1% from the beginning of the year. In the short term, agricultural demand for monoammonium phosphate, diammonium phosphate, and upstream phosphate rock will remain high under high economic conditions. However, even if the agricultural business cycle declines in the future, crops are the basic production and living materials, and the planting area must be basically guaranteed. , Which means that its demand for pesticides, fertilizers and upstream raw materials will remain at the stable level just needed.
Lithium iron phosphate batteries have become the "dark horse" in the new energy era, giving rise to rapid growth in the demand for upstream raw materials: in the context of my country's vigorously encouraging the development of new energy industries, the demand for lithium power batteries has risen rapidly. According to different cathode materials, lithium batteries can be divided into two categories: ternary lithium batteries and lithium iron phosphate batteries. The ternary lithium battery mainly uses lithium nickel cobalt manganese oxide or lithium nickel cobalt aluminate as the positive electrode material, and the lithium iron phosphate battery uses lithium iron phosphate as the positive electrode material.
Phosphate ore is the main raw material upstream of the lithium iron phosphate industry chain. For every ton of lithium iron phosphate produced, 0.5-0.65 tons of phosphate ore (equivalent to pure) and 0.8 tons of monoammonium phosphate are required. The rapid growth of demand for lithium iron phosphate will move upstream along the industrial chain. In the same direction, the demand for phosphate rock in the field of new energy has increased. In the actual production process, a 1GWh lithium iron phosphate battery requires 2500 tons of lithium iron phosphate as the cathode material, and the center is estimated to need about 1,440 tons of phosphate rock (reduced pure, that is, P2O5=100%). Based on calculations based on relevant data from the new group of Wanlian Securities and Power, we predict that by 2025 the demand for lithium iron phosphate will reach 1.914 million tons, corresponding to 1.11 million tons of phosphate rock (equivalent to pure), accounting for about 4.2% of the total demand for phosphate rock, by 2021 -2025 The compound growth rate of the industry exceeds 60%.
The upstream leader is pushing the midstream, and the industry pattern may usher in a major reshuffle
In recent years, upstream phosphate chemical industry manufacturers have been subject to policy restrictions and rectification orders for phosphate mining and the expansion of ammonium phosphate, industrial ammonium, and phosphate fertilizers under the environment where the country emphasizes chemical safety and environmental protection. Therefore, because the traditional way of production expansion is no longer able to support the long-term development of enterprises, the upstream leaders are looking for ways to expand to the middle and lower reaches of the industrial chain. Judging from the current situation, lithium iron phosphate has a low technical threshold for upstream leaders with years of chemical synthesis and process production experience. Several phosphorus chemical companies with phosphate rock resources have decided to go out in person. From the perspective of the capacity volume of the current phosphorus chemical companies and other companies in the cross-border production of lithium iron phosphate, as the demand for lithium iron phosphate continues to grow strongly in the future, there is the possibility of drastic changes in the structure of the lithium iron phosphate industry.
The subsequent industry reshuffle may be divided into two stages:
1. The leading chemical industry with cost advantage (phosphorus source) enters the track. Because of its significant cost advantage, it has a severe impact on the existing structure. Existing enterprises without cost advantages such as phosphorous source will directly withdraw from the market, and the industry structure will improve rapidly;
2. Companies with cost advantages start to compete with each other in price and technology. Therefore, the leading companies in the upstream raw materials field that are gradually transforming to the downstream may be the strong industry leaders in the future, which will form a situation where the upstream will force the midstream and eventually lead to a major reshuffle of the downstream new energy material industry such as lithium iron phosphate. These upstream companies that have successfully entered the new energy track will enjoy a double increase in profit and valuation in the future.
Source: Mobile Public Account
