In May 2018, the US Bloomberg reported that, Elon Musk, the CEO of Tesla, stated in a conference call that, Tesla has mastered the technology of reducing cobalt metal usage in LIB. His original words were: We think we can get cobalt to almost nothing.
Why cobalt usage needs to be reduced? ASIACHEM believes that, there mainly are three reasons:
1. At present, cobalt metal supply and demand market is unbalanced, Congo (Kinshasa) is under political upheavals, which leads the prices of cobalt metal and its products largely increase;
2. Base on the current ternary materials system, the global cobalt resources are far from supporting each country banning sales of gasoline and diesel vehicles, and EV capacity planning of each major vehicle manufacturers;
3. In the ternary material, main role of nickel is to increase the battery energy density. With continue increasing of energy density requirement, high nickel ternary material will be the market mainstream. Information shows that, the power battery which Tesla Model 3 used is NCA battery, and nickel, cobalt and aluminum element ratio is 8:1.5:0.5.
For the domestic new energy vehicle (NEV) enterprises, in Feb 2018, NEV subsidy further declines, in order to seek for higher subsidies, these enterprises one after another turn to high nickel ternary material batteries. Meanwhile, power battery and material enterprises are strengthening R&D and distribution of high nickel ternary materials one after another.
‘Nickel’ sources of ternary materials and their precursors mainly are NiSO4•6H2O. Most countries and areas of the world currently use method of dissolving nickel metal in sulfuric acid to prepare NiSO4•6H2O, while in China, it is mainly produced by intermediate goods, which has large pollutions during the manufacturing process. With continuous increasing of requirement of environmental protection, the domestic NiSO4•6H2O manufacturers are transforming to method of using nickel metals as raw materials.
United States Geological Survey data shows that, in 2017, global nickel reserves was 74Mt; nickel output was 2.1Mt, among, nickel outputs of Indonesia and Philippines ranked Top 2, which was 400kt and 230kt, respectively. In terms of downstream application structure of nickel metals, public information shows that, from the view of global, stainless steel occupation was about 68%, battery field occupied about 3% and others occupied about 29%; from the view of China, stainless steel occupation reached 82%, battery field occupied about 2% and others occupied 16%.
Public data shows that, in 2017, the world accumulated NiSO4•6H2O capacity was almost 600kt and output was about 500kt, among, China NiSO4•6H2O capacity was about 350kt and output was about 300kt. Except ternary material batteries, downstream applications of NiSO4•6H2O also include Ni-MH batteries and electroplating. Among, the battery fields total NiSO4•6H2O usage occupied 80%.
In terms of requirement, take China as an example, in Apr 2017, MIIT released <Vehicle Industry Middle and Long Term Development Plan>, pointed out that, NEV production and sales volume will reach 2M by 2020. ASIACHEM assumes that each NEV used power LIB volume is 60kWh, if all these vehicles use NCM523 battery, then in 2020, requirement of NiSO4•6H2O of China will be 348.4kt; if all these vehicles use NCM811 battery, then in 2020, requirement of NiSO4•6H2O of China will be 553.4kt.
There are many enterprises in both the world and China actively expanding production of NiSO4•6H2O at present, to meet requirement of high nickel ternary materials in the future.
In Apr 2018, a top leader of BHB Billiton Ltd. stated that, the nickel smelter of the company which locates in Western Australia will start producing NiSO4•6H2O in 2019. Currently, the company is making a plan which will make its output doubled.
In Nov 2017, LG Chem invested KRW 1bn to Kemco, a subsidiary company of Korea Zinc Co. and obtained 10% of Kemco. Kemco is South Korean supplier of NiSO4•6H2O. The company will new construct a NiSO4•6H2O factory which capacity is 20kt/a, and plans to gradually increase its capacity to 80kt/a in the next few years.
In Aug 2017, GEM stated on Investor Interaction Platform that, the company announced to new increase 40kt NiSO4•6H2O capacity in May 2016 to meet requirement of increasing power battery industry. Recently, the company will expand its production according to the market requirement.
ASIACHEM believes that, global and China nickel downstream consumption structure will be changed, downstream market proportions of ternary materials, especially high nickel ternary materials, will be further increased. Although view from the global nickel resource reserve and output, to produce high nickel ternary material battery needed NiSO4•6H2O is sufficient, as the rapid development of the high nickel ternary materials, and the stricter environmental protection situation faced by China enterprises, NiSO4•6H2O is possibly to face supply and demand imbalance contemporarily, and lead the prices to go up. To those enterprises which already have NiSO4•6H2O capacity, they can seize more market share in the future by way of actively expanding capacities; while to those enterprises which are ready for distributing NiSO4•6H2O capacities, they should submit EIA report as soon as possible and strive for completing related capacity as soon as possible.