Financial Services Association, April 25 (Reporters Liu Yue and Zeng Chuchu) The “haze” of structural overcapacity in the lithium battery industry chain has not dissipated. Under the “volume increase and price reduction” market, the performance of enterprises in the industrial chain is divided. At the same time, new technologies such as super rechargeable batteries and solid state batteries have become hot spots in the market. The future development trend of the battery industry has attracted market attention.

Coinciding with this, CIBF 2024 (16th Chongqing International Battery Technology Conference/Exhibition) hosted by the China Chemical and Physical Power Industry Association will be held at the Chongqing International Expo Center from April 27 to 29, 2024.

Academicians such as Ouyang Minggao, Cheng Huiming, and Sun Xueliang confirmed their attendance, bringing forward cutting-edge technology prospects in the lithium battery industry. This is also the first time that CIBF2024 entered Sichuan and Chongqing. More than 2,200 companies including Ningde Era (300750.SZ), Pilot Intelligence (300450.SZ), Putailai (603659.SH), and Xiamen Tungsten Industry (600549.SH) participated in the exhibition, which is expected to attract more than 200,000 visitors.

Lithium battery industry chain Q1 “volume increase and price reduction”

There is structural overcapacity in the lithium battery industry chain, and the “haze” of prices has not dissipated. In the first quarter of this year, cell prices continued to decline, and material prices bottomed out one after another. According to Shanghai Steel Union data, lithium iron phosphate batteries (power type) fell 9.5% from 0.42 yuan/Wh in early January to 0.38 yuan/Wh at the end of March this year; ternary batteries fell from 0.51 yuan/Wh to 0.47 yuan/Wh, a decrease of 7.8%.

Shipments showed an upward trend. Preliminary research data from the Advanced Industrial Research Institute (GGII) showed that China's lithium battery shipments in Q1 2024 were 200 GWh, an increase of 18% over the previous year. Among them, shipments of power and energy storage batteries were 149 GWh and 40 GWh respectively, up 19% and 14% year-on-year respectively.

Judging from the disclosed quarterly reports, the performance of downstream battery manufacturers is divided. The Ningde era did not escape price fluctuations. Q1 revenue fell 10.41% year on year, but net profit was 10.41% year on year, up 7% year on year, and gross margin hit a record high in nearly 2 years; Everweft Lithium Energy (300014.SZ) and Guoxuan Hi-Tech (002074.SZ) Q1 net profit fell 6.49% and 8.56%, respectively.

In terms of raw materials, the price of lithium carbonate experienced a sharp rise and fall. From 500,000 yuan/ton at the beginning of last year, it fell below 100,000 yuan/ton by the end of the year. Since 2024, it has continued to decline, but recently there has been a slight rebound. According to data from Zhuochuang News, the average price of battery-grade lithium carbonate in the first quarter was 100,000 yuan/ton, down 24.5% from the previous quarter.

Tianqi Lithium (002466.SZ), one of the “lithium mining duos,” previously predicted a loss of 3.6 billion to 4.3 billion yuan in Q1, leading to the collapse of the lithium sector in early trading the next day.

Regarding the reason for the huge loss in performance, Tianqi Lithium stated in the announcement that due mainly to fluctuations in the lithium product market, the sales price of the company's lithium products dropped sharply compared to the same period last year, and the gross profit of lithium products dropped sharply as a result. Additionally, the associated company SQM is affected by tax litigation and is expected to reduce its net profit for the first quarter of 2024 by approximately $1.1 billion. Tianqi Lithium believes that this matter is expected to reduce the company's net profit to mother.

On the midstream side, the prices of cathode materials, anode materials, and electrolytes fell to the bottom, but recently the prices of anode materials have rebounded. At the beginning of April, there was news in the industry that BYD (002594.SZ) had begun to increase the price of ultra-low price orders from leading negative electrode manufacturers, which is expected to increase by about 10%. CIFA reporters learned in multiple interviews that the price increase is a reasonable return compared to the previous ultra-low prices in the industry; it is not a sign of a reversal in the industry.

It is worth noting that production schedules have recently recovered in the industrial chain. Previously, people with lower back cathode materials and head anode materials told the Financial Federation reporter that production schedules had recently rebounded. In the fourth quarter of last year, there were many arguments in the industry that this year's Q1 would be a low utilization rate of the lithium battery industry. Supply release slowed in Q2 and the second half of the year, and demand gradually rose, which is expected to usher in an inflection point.

Quasi-solid-state batteries will be mass-produced and launched within the year

Since the latest “progress” in solid-state batteries comes out from time to time in the industry, whether the “ultimate” product of solid-state batteries is ready to be launched has attracted attention in the capital market. After Zhiji L6 announced that “the industry's first solid state battery will be launched”, the GAC Group also officially announced that all solid-state batteries will be mass-produced in 2026 to be equipped with Haobo models. Affected by this, recently “solid state batteries” have once again become one of the popular concepts in the A-share market.

A CIFA reporter participated in the world's first test of the Zhiji L6 on April 23. Liu Tao, co-CEO of Zhiji Auto, told CFC reporters that the first generation of Lightyear solid-state batteries will actually be mass-produced within this year, and Zhiji Auto initially plans to mass-produce 1,000 vehicles within this year.

Compared to traditional lithium-ion batteries, which include the four major components of a positive electrode, anode, electrolyte, and diaphragm, Zhiji Auto's first-generation solid-state battery consists of a composite positive electrode, composite anode, electrolyte, and electrolyte diaphragm. Zhiji Auto people told the Financial Federation reporter that the semi-solid state batteries that were launched this year still have liquid injection processes, and the liquid ratio is about 5%-15%. The company will aim to mass-produce all-solid-state batteries in 2026.

The industry has mixed opinions on the future development of solid-state batteries. According to GGII's forecast, solid-state batteries are expected to be loaded on a large scale in 2024, and the annual installed capacity is expected to exceed 5 GWh. Dongxing Securities's April research report pointed out that with the gradual implementation of solid-state battery technology at the vehicle level and the continuous increase in technology research and development bureaus of mainstream car companies, solid-state battery technology is expected to usher in a development milestone from quantitative to qualitative change in the early stages of industrialization, and the market's expectations for the accelerated implementation of solid-state battery technology from 0 to 1 continue to rise.

However, the Ningde era expressed concern. At the company's performance exchange meeting on March 16, Zeng Yuqun rarely attended and said that there are still many difficulties that need to be overcome on the solid-state battery technology route. If it can be turned into a commercial route, it is also far away, but he also stated that “investment has increased a lot recently.”

At CIBF2024, Ouyang Minggao, an Academician of the Chinese Academy of Sciences and a professor at Tsinghua University, will share a speech on “Global Solid-State Battery Technology Development Prospects” at the opening ceremony. Wu Kai, chief scientist of the Ningde Era, Li Zheng, general manager of SAIC Qingtao Energy Technology Co., Ltd., and Be Xiaofei, director of battery materials development director of China First Automobile Group Co., Ltd., will share topics related to solid state batteries at the “All Solid-State Batteries and New System Batteries” theme session to be held on April 28.

In terms of other new technologies, supercharging technology, sodium-ion batteries, and fuel cell key technologies also received attention at the conference, and a branch venue will be set up. CIFA will continue to follow the 16th Chongqing International Battery Technology Conference to bring investors the latest news from the front line.