Xinzhoubang electrolyte 'law of competition'

In the face of rising raw material prices and competitor output expansion, how does Xinzhoubang break through in the market? Gaogong Lithium understands that Xinzhoubang’s strategies include: first, through continuous production expansion, to further increase production utilization; second, based on the stability of formula and quality, using high-end products to maintain market prices and customer recognition. In 2020, the designed output of Xinzhoubang battery chemicals is 73,000 tons, and the actual production is 40,000 tons, with a production utilization rate of 55%. Xinzhoubang said that it was important because last year's new production was not put into operation at the beginning of the year, and the release of new production lines was also a gradual process. By the fourth quarter, the production utilization rate had increased. This can also be clearly seen from the financial data, from the first quarter to the fourth quarter, its revenue and net profit have also gradually increased. At present, the most important barriers to competition for Xinzhoubang electrolyte are the stability of formulation and quality, as well as the self-produced variety of additives. 'Our cooperation with large manufacturers is important to cooperate with large manufacturers to design formulas that meet their requirements. We will use our own formulas for small and medium-sized customers. After all, large manufacturers have relatively strong Ru0026D capabilities and have more personalized requirements for products. 'Xin Zhoubang said during the survey. In terms of additives, on April 21, Xinzhoubang announced that it plans to invest 1.2 billion yuan in Jiangsu to build a lithium battery additive project with an annual output of 59,000 tons. The first phase investment is about 660 million yuan, and it will reach production in 2 years. It will build an annual output of 29,300 tons of electrolyte additives (including CEC, FEC, VC, DTD, etc.). Its holding company, Jiangsu Hankang, has a total output of VC and FEC additives of approximately 2,000 tons. The expansion of the production of additives by Xinzhoubang will help complement the supply of existing electrolyte raw materials, further expand the product scale, and meet the strong downstream demand. In terms of market prices, the electrolyte has risen from 70,000 yuan/ton in July to August last year to the current 200,000 yuan/ton. According to industry sources, lithium hexafluorophosphate accounts for about 35%-40% of the cost of electrolyte formulations. The price is important due to the increase in the price of lithium hexafluorophosphate. Regarding the continuous price increase cycle, Xinzhoubang’s prediction is that the expansion cycle of lithium hexafluorophosphate is generally about one and a half years, and it is estimated that the current price can be maintained until the first quarter of 2022. The reasonable price of the electrolyte is around 100,000 to 150,000 yuan/ton. The current price is unrealistically high, but due to the impact of lithium hexafluorophosphate, the current price may continue until the first quarter of next year. Unlike Tianci Materials' self-produced lithium hexafluorophosphate, Xinzhoubang adopts a purchasing method. At present, the price of Xinzhoubang's products is higher than that of Tianci materials. In this regard, Xinzhoubang said that it is important to distinguish between the product grades of lithium hexafluorophosphate. At present, the long-term lithium hexafluorophosphate supplier of Xinzhoubang is Jiangsu Jiujiu Technology Co., Ltd., a subsidiary of Yan'an Bikang. Some high-end products of its customers specify the electrolyte of Xinzhoubang. It is worth mentioning that at present, many battery companies have begun to extend upstream, such as the joint construction of cathode materials by Yiwei Lithium Energy and German Nano, and the construction of power lithium battery raw materials by Guoxuan Hi-Tech. In this regard, Xinzhoubang said that the current economic benefits of battery manufacturers' own electrolyte production are not great, so it is better to outsource. In terms of market competition, the current share of Xinzhoubang is about 15%. GGII data shows that in 2020, TOP6 accounted for 77.6%, TOP3 accounted for 61.4%, and the market concentration was further improved compared with the previous year. GGII believes that the main reason for the increase in concentration is that the head electrolyte company has global supply capabilities, has the advantages of customers, production, supply chain, and capital. It has close cooperation with the upstream and downstream industry chains and has won more customer orders in 2020. .