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Strong Growth in Lithium Demand to Power FMC Corp., Rockwood Holdings
by：CTECHi
2020-03-23
A new type of car being produced is likely to change the future of the automotive industry.
Commonly referred to as zero emission vehicles (ZEV and PZEV)
Almost every major car manufacturer is developing a strategy that is ready to meet the urgent need for these vehicles with higher fuel efficiency and less pollution.
Potential and differentiated technical components for making such vehicles a viable, sustainable and successful alternative to gasoline-powered internal combustion engines [ICE]
The car used to be lithium. ion (li-ion)batterypack.
The unique chemical properties of lithium, mainly the low atomic weight and the ability to ionize or lose electrons (i. e.
Electricity)
Make production li-possible
Compared to the older generation of lead-acid, nickel-cadmium and nickel metal hydrogenation battery systems, Ion battery assemblies with high energy density, power and space compact.
Introduction to Li\'s global market
In the past few years, ion batteries have increased by more than 20% annually (
Ober/USGS 2007).
According to the U. S. Geological Survey, LeeLithium ion and lithium
Polymer batteries seem to have the greatest potential for growth.
It is estimated that the world market for these rechargeable batteries was $4 billion in 2005.
Recently, Tesla Motor (
Tesla Motor, 2008)
Their first pure-battery-powered sports car, ZEV, began commercial production and delivery.
I think, with heavy
The advent of battery electric vehicles [BEV]and Plug-
Mixed power car]PHEV]
Commercial delivery scheduled for 2010 (autobloggreen. com,2008)
I believe that the demand for lithium and lithium compounds will be closely related to production levels that are close to saturation, resulting in tight domestic capacity.
This assumption is based on the consumption and price of lithium and lithium compounds for existing applications such as laptops and mobile phone batteries in the foreseeable future, as well as the discovery of emergency uses produced by InBev/PHEV
Relative to future needs, I would like to take you to do a simple exercise that allows you to feel the potential need for lithium-based materials needed to make batteries to power the next generation of cars. The li-
The ion battery pack designed specifically for ZEV/szev is a complex system with a weight of between 400 lbs. 1,000 pounds.
What exactly are these lithium materials?
The ion battery pack may be proprietary information, which may be difficult to estimate.
Let us begin with what we understand;
A 15-inch Macbook Pro made from an Apple computer (NASDAQ:AAPL).
This stylish laptop comes with 60-watt-hourlithium-
85-watt polymer battery pack can be produced (18. 5 Voltsdc X 4. 6 Amps)
Run the laptop for about 5 hours of power. The li-
The ion battery system on the Tesla sports car contains 6,831 li-
Ion batteries, designed to produce 200 KW peakoutput power, but the peak output is actually 189 KW at 8,000 rpm due to loss of heat, resistance and friction efficiency (teslamotors. com,2008).
In order to generate a peak power of 200 kw v, li-375 V-
Ion battery system (
Berdichevsky, et al, 2006)
Therefore, we need to learn from (
200 kW W/kW/375 V)
Or 533 amps.
A simple ratio of the maximum or peak current required to power a sports car (533Amps)
Laptop (4. 6 Amps)
Tell me, the amount of lithium ion needed in the vehicle is (533 Amps / 4. 6 Amps)
Or 116 times the lithium content in a laptop (
Here X is a simple amplification of the amount of lithium-based compounds in rechargeable li-ion batteries).
Produce 100 or even 10,000 compounds a year ~ 100,000, and then the results of 10 major car manufacturers around the world are diversified, and we are considering the additional needs of lithium-based materials for millions of euros.
Similarly, GM will produce a lot of Chevrolet voltage (NYSE:GM)
Contains a more moderate 16 kWhr (58 MJ)li-
Ion battery system (wikipedia. org,2008).
This is because, unlike Tesla BEV, the Chevrolet Volt is PHEV and it has a small gasoline powered ice that can be li-
The ion battery system, which in turn provides power to the power transmission system.
This car can be in li-
Ion battery system within 40 miles.
Vehicle driven by motor designed for apeak electrical output 130-
140 kW or peak mechanical output (autobloggreen. com,2008).
Technical specifications for vehicles provided on the network the voltage of the battery pack is 320-
350 V, which means maximum current consumption (
140 kW X 1,000 W/kW/320 V)or 438 Amps.
So this answer should tell you the relative number of lithium compounds you need to produce lithium
Ion battery system of a car (
Compared to the amount required for the laptop), right?
The two domestic lithium producers that mine, refine and produce commercial grade lithium and lithium-based compounds in the United States are FMC Corporation (NYSE:FMC)
As well as Chemetall GmbH, a German company acquired by Rockwood Holdings based in the United States (NYSE:ROC)in 2004.
Both the FMC and ROC products and product portfolios are very diverse, but they do generate huge revenue from their respective lithium sectors.
Together, the two companies have a virtual lock on domestic lithiumproduction.
On May 1, 2008, the FMC announced the election of Roberto.
The board of directors of Pallash.
I think the interesting thing about dating is that
Pallash, a veteran in the Automotive industry, has worked in Automotive parts manufacturers such as Visteon and TRW Automotive and has management experience.
I believe he may be the right person to lead the FMC into the emerging automotive battery market.
In the short term, I expect both FMC and Chemetall to announce the expansion of lithium production and refining capacity, or make significant investments in new production, or increase lithium production assets through overseas acquisitions.
I don\'t think the competition in the lithium market will hurt any company\'s profits because of the exponential growth in lithium-based compound demand.
Company financial analysis on Friday, May 9, 2008, FMC closed at more than $67, which is my first good move to write a story about FMC on \"looking for Alpha\" for $58 (The-
The future of battery technology.
According to Yahoo
Finance, the company trades in a very reasonable forward P/E (F P/E)ratio of 15.
Analyst earnings per share [EPS]
The consensus for FY08 is estimated at $3.
97, an increase of 28% over FY07.
Revenue is also expected to achieve double-digit growth in fiscal 08.
ROC, the parent company of Chemetall GmbH, closed at $34. 55.
The company traded at a price-earnings ratio of 14.
Analyst EPS consensus estimates that the price for 08 this year is $2. 18, up from $1.
Made 87 a year ago.
With our recent price increases in the field of materials and commodities, I expect the company to continue to achieve good results.
The main statistics of the ROC financial statements show that the high liability/equity ratio of ROC is 1.
57 indicates that the company has high liabilities but has assets in capital-intensive factories, property and equipment.
In addition, the current ratio is 2.
32. the ability to pay short-term debt is very healthy.
The operating margin of Roc is two digits lower.
Conclusion Both sfmc and ROC trade at a reasonable valuation and provide investors with a diversified, well-hedged way to cope with the coming boom in demand.
I believe we are witnessing an unprecedented revolution in car production, but due to the progress of the battery system, the rise in gasoline prices and
Consumers demand higher fuel efficiency and less vehicle pollution.
Commonly referred to as zero emission vehicles (ZEV and PZEV)
Almost every major car manufacturer is developing a strategy that is ready to meet the urgent need for these vehicles with higher fuel efficiency and less pollution.
Potential and differentiated technical components for making such vehicles a viable, sustainable and successful alternative to gasoline-powered internal combustion engines [ICE]
The car used to be lithium. ion (li-ion)batterypack.
The unique chemical properties of lithium, mainly the low atomic weight and the ability to ionize or lose electrons (i. e.
Electricity)
Make production li-possible
Compared to the older generation of lead-acid, nickel-cadmium and nickel metal hydrogenation battery systems, Ion battery assemblies with high energy density, power and space compact.
Introduction to Li\'s global market
In the past few years, ion batteries have increased by more than 20% annually (
Ober/USGS 2007).
According to the U. S. Geological Survey, LeeLithium ion and lithium
Polymer batteries seem to have the greatest potential for growth.
It is estimated that the world market for these rechargeable batteries was $4 billion in 2005.
Recently, Tesla Motor (
Tesla Motor, 2008)
Their first pure-battery-powered sports car, ZEV, began commercial production and delivery.
I think, with heavy
The advent of battery electric vehicles [BEV]and Plug-
Mixed power car]PHEV]
Commercial delivery scheduled for 2010 (autobloggreen. com,2008)
I believe that the demand for lithium and lithium compounds will be closely related to production levels that are close to saturation, resulting in tight domestic capacity.
This assumption is based on the consumption and price of lithium and lithium compounds for existing applications such as laptops and mobile phone batteries in the foreseeable future, as well as the discovery of emergency uses produced by InBev/PHEV
Relative to future needs, I would like to take you to do a simple exercise that allows you to feel the potential need for lithium-based materials needed to make batteries to power the next generation of cars. The li-
The ion battery pack designed specifically for ZEV/szev is a complex system with a weight of between 400 lbs. 1,000 pounds.
What exactly are these lithium materials?
The ion battery pack may be proprietary information, which may be difficult to estimate.
Let us begin with what we understand;
A 15-inch Macbook Pro made from an Apple computer (NASDAQ:AAPL).
This stylish laptop comes with 60-watt-hourlithium-
85-watt polymer battery pack can be produced (18. 5 Voltsdc X 4. 6 Amps)
Run the laptop for about 5 hours of power. The li-
The ion battery system on the Tesla sports car contains 6,831 li-
Ion batteries, designed to produce 200 KW peakoutput power, but the peak output is actually 189 KW at 8,000 rpm due to loss of heat, resistance and friction efficiency (teslamotors. com,2008).
In order to generate a peak power of 200 kw v, li-375 V-
Ion battery system (
Berdichevsky, et al, 2006)
Therefore, we need to learn from (
200 kW W/kW/375 V)
Or 533 amps.
A simple ratio of the maximum or peak current required to power a sports car (533Amps)
Laptop (4. 6 Amps)
Tell me, the amount of lithium ion needed in the vehicle is (533 Amps / 4. 6 Amps)
Or 116 times the lithium content in a laptop (
Here X is a simple amplification of the amount of lithium-based compounds in rechargeable li-ion batteries).
Produce 100 or even 10,000 compounds a year ~ 100,000, and then the results of 10 major car manufacturers around the world are diversified, and we are considering the additional needs of lithium-based materials for millions of euros.
Similarly, GM will produce a lot of Chevrolet voltage (NYSE:GM)
Contains a more moderate 16 kWhr (58 MJ)li-
Ion battery system (wikipedia. org,2008).
This is because, unlike Tesla BEV, the Chevrolet Volt is PHEV and it has a small gasoline powered ice that can be li-
The ion battery system, which in turn provides power to the power transmission system.
This car can be in li-
Ion battery system within 40 miles.
Vehicle driven by motor designed for apeak electrical output 130-
140 kW or peak mechanical output (autobloggreen. com,2008).
Technical specifications for vehicles provided on the network the voltage of the battery pack is 320-
350 V, which means maximum current consumption (
140 kW X 1,000 W/kW/320 V)or 438 Amps.
So this answer should tell you the relative number of lithium compounds you need to produce lithium
Ion battery system of a car (
Compared to the amount required for the laptop), right?
The two domestic lithium producers that mine, refine and produce commercial grade lithium and lithium-based compounds in the United States are FMC Corporation (NYSE:FMC)
As well as Chemetall GmbH, a German company acquired by Rockwood Holdings based in the United States (NYSE:ROC)in 2004.
Both the FMC and ROC products and product portfolios are very diverse, but they do generate huge revenue from their respective lithium sectors.
Together, the two companies have a virtual lock on domestic lithiumproduction.
On May 1, 2008, the FMC announced the election of Roberto.
The board of directors of Pallash.
I think the interesting thing about dating is that
Pallash, a veteran in the Automotive industry, has worked in Automotive parts manufacturers such as Visteon and TRW Automotive and has management experience.
I believe he may be the right person to lead the FMC into the emerging automotive battery market.
In the short term, I expect both FMC and Chemetall to announce the expansion of lithium production and refining capacity, or make significant investments in new production, or increase lithium production assets through overseas acquisitions.
I don\'t think the competition in the lithium market will hurt any company\'s profits because of the exponential growth in lithium-based compound demand.
Company financial analysis on Friday, May 9, 2008, FMC closed at more than $67, which is my first good move to write a story about FMC on \"looking for Alpha\" for $58 (The-
The future of battery technology.
According to Yahoo
Finance, the company trades in a very reasonable forward P/E (F P/E)ratio of 15.
Analyst earnings per share [EPS]
The consensus for FY08 is estimated at $3.
97, an increase of 28% over FY07.
Revenue is also expected to achieve double-digit growth in fiscal 08.
ROC, the parent company of Chemetall GmbH, closed at $34. 55.
The company traded at a price-earnings ratio of 14.
Analyst EPS consensus estimates that the price for 08 this year is $2. 18, up from $1.
Made 87 a year ago.
With our recent price increases in the field of materials and commodities, I expect the company to continue to achieve good results.
The main statistics of the ROC financial statements show that the high liability/equity ratio of ROC is 1.
57 indicates that the company has high liabilities but has assets in capital-intensive factories, property and equipment.
In addition, the current ratio is 2.
32. the ability to pay short-term debt is very healthy.
The operating margin of Roc is two digits lower.
Conclusion Both sfmc and ROC trade at a reasonable valuation and provide investors with a diversified, well-hedged way to cope with the coming boom in demand.
I believe we are witnessing an unprecedented revolution in car production, but due to the progress of the battery system, the rise in gasoline prices and
Consumers demand higher fuel efficiency and less vehicle pollution.
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