The overcapacity of anode electrode materials “hidden worry” of is now highlighted
Since 2022, the market’s enthusiasm for anode materials has only increased, new entrants have continued to increase, competition has become more intense, and production capacity has doubled. Since 2022, 29 projects have been put into production expansion of anode materials.
There are mainly three types of enterprises entering the field of anode materials. One of them is existing manufacturer of anode electrode materials, the other is a battery manufacturer, and the third is the new entrant from other industries.
The number of entrants is increasing, and the competition for anode materials is becoming more and more fierce. The reason is that on the one hand, it is undoubtedly directly driven by the strong market demand.
In 2021, China’s anode material shipments will be about 720,000 tons, a year-on-year increase of 97%, and it is expected to maintain a substantial growth trend in 2022.
In the long run, China’s lithium battery shipments will reach 1,456GWh in 2025. According to the standard of 1,000 tons of anode materials required for 1GWh, the demand for anode materials in 2025 will reach 1,456,000 tons.
Shortage supply
On the other hand, due to the shortage of graphitization supply and the rising prices of raw materials such as upstream petroleum coke and needle coke, the average price of artificial graphite anode electrodes in Q1 this year generally increased by 5%-10% compared with last year.
At present, the anode electrode material enterprises are full of orders, and the overall supply is in short supply. It is expected that the anode electrode price will remain high before Q4 this year.
In this situation, the entry of power battery companies into anode materials is conducive to maintaining stability of the supply chains of their own and improving their cost bargaining advantages.
Existing material companies’ expanding the production capacity of anode materials is also conducive to improving production capacity of their own and forming a large-scale effect.
New capacity
However, it is worth noting that under the competition for capital, the new domestic production capacity in the field of anode materials since 2022 has reached 4.006 million tons, which can meet the battery capacity demand of about 4,000GWh.
If the production capacity layout of domestic enterprises in the field of anode electrodes is superimposed last year, this figure will be further enlarged.
This far exceeds the demand of 1.456 million tons of anode materials in my country in 2025.
Disadvantage
Anode materials belong to high-energy-consuming industries, the government approval and construction cycle is relatively long, and there are many risks of uncertainty.
The superimposed scale of current investment and expansion has been equal to or even surpassed the volume required for power battery expansion.
With the trend of mass investment and expansion, the trend of structural overcapacity in the future may become increasingly prominent.
Price trend
In terms of price, when the seller’s market turns into a buyer’s market, the price of anode materials is bound to fall. With the further release of domestic needle coke production capacity and graphitization production capacity, the price of anode materials is expected to show an inflection point in the second half of 2022.
Most of the new graphitization production capacity will be launched in the second half of 2022, but the superimposed production capacity will climb. Next, if the large-scale production capacity continues to be released in a concentrated manner, the price of anode materials may “bottom out”.
Competitive landscape
In terms of the competitive landscape, the entry of multiple parties will inevitably accelerate the market reshuffle in this field. Whether the existing manufacturers can continue to maintain their advantages in technology and customers, and whether the new entrants can quickly gain market recognition and occupy market share, it remains to be further observed.
However, it is undeniable that if the companies involved in it want to stand out, they must make great efforts in upstream and downstream resources, team support, technology research and development, and financial strength.
