Lithium-Based Products: Demand Growth in China

By Zhang Jiangfeng, China Nonferrous Metal Industry Association

1. Growth of production
The output of lithium carbonate in China in 2014 was around 7% higher than in the previous year. Spodumenite output declined drastically, the price of lithium mineral concentrate kept going up, the financial performance of lithium salt processing enterprises declined seriously and some of them started to suffer losses.
2. Import and export
China imported over 13 000 tons of lithium carbonate in 2014, but exported 2 462 tons. Major import sources included Chile and Argentina, providing 8 454 tons and 4 826 tons, respectively. Pushed by the growth of demand in overseas markets, the amount of lithium hydroxide exported from China increased somewhat in 2014, with net exports reaching 6 105 tons, nearly 50% more than in the previous year. Major export destinations included Japan, India and Korea, receiving 1 703 tons, 1 158 tons and 549 tons, respectively. The net amount of lithium chloride imported to China increased almost 200% in 2014. Table 3 shows the import and export.
The amount of lithium cobaltate exported from China (excluding the amount supplied to lithium battery plants owned by Japan and Korea in Chinese territory) reached 9 473 tons in 2014, an increase of 68% over the previous year.
Producers of lithium-battery cathode materials in China have their own advantages in product development. Great quantities of lithium-based products such as lithium cobaltate and lithium nickel cobalt manganese oxide are exported for use in lithium battery enterprises hosted by foreign countries such as Japan and Korea. The net volume of lithium-battery cathode materials exported from China was over 15 000 tons in 2014.
3. M&A promoting the development of the lithium sector
China hosts more than 20 basic lithium salt producers today. Many are small-scale. Quite a few enterprises in the lithium sector of China conducted M&As in 2014. For example, Sichuan Tianqi Lithium Industries Inc. acquired Galaxy Lithium (Jiangsu) Co., Ltd.; and Sichuan Yahua Industrial Group Co., Ltd. acquired both Sichuan State Lithium Material Co., Ltd. and Sichuan Blossom Lithium Co., Ltd. The scale of a producer’s total production capacity expanded constantly. For example, the capacity of basic lithium salts operated by Jiangxi Ganfeng Lithium Co., Ltd. reached 25 000 t/a. Breakthroughs were made in technologies for the recycling and reuse of lithium resources. Scrap lithium materials generated in industrial production can already be recovered in an economical way.
Sichuan Tianqi Lithium Industries Inc. transformed from a pure lithium processing business to a business integrating the storage, development and trade of lithium resources with the processing of lithium series products, through vertical resource expansions and horizontal industrial acquisitions conducted in recent years. The company established great advantages in lithium resources and scale advantages in the intensive processing of lithium series products. Also the company actively strengthened the market penetration of lithium-based products and carried out a planned expansion of capacity. Galaxy Lithium (Jiangsu) Co., Ltd. was acquired by Sichuan Tianqi and will conduct upstream/downstream interaction and coordination of the industrial chain with Talison Lithium Co., Ltd. Product structure complementation will also be done with Shehong Base to effectively upgrade the overall competitiveness of business units in the company.
The situation of Jiangxi Ganfeng Lithium Co., Ltd. is still sound. The business revenue by the company was RMB869 million in 2014, and the total profit was RMB101.27 million, an increase of 17.62% over the previous year. The company made overall strategic arrangements for the extension of industrial structure and the optimization and upgrade of the product chain in 2014. The construction of major projects by the company is making steady headway. A 10 000 t/a lithium salt unit successfully started production. Some production lines of the super-thin lithium belt and ternary precursor project are completed and put on stream. The output of lithium-based products such as battery-grade metal lithium, battery-grade lithium hydroxide and battery-grade lithium carbonate is increasing steadily, and the firm’s international market shares keep going up.

Table 1   Output of major lithium-based products in China, 2014    (kt)

Product    2014    2013    YoY growth (%)    Remarks
Lithium carbonate    40.7    38    7.1    Including industrial grade and battery grade
Monohydrate lithium hydroxide    20.5    22    -6.8    -
Metal lithium    2.6    2.3    13    -


Table 2  Output of major lithium-battery cathode materials in China, 2014   (kt)

Product    2014    2013    YoY growth (%)
Lithium cobaltate    43    38    13.2
Lithium nickel cobalt manganese oxide    31    23    34.8
Lithium manganate    12    10    20
Lithium iron phosphate    12    5    140


Table 3    China’s import & export of lithium salts, 2014

?    Amount (ton)    Value (US$)
Lithium hydroxide    Import    42.308    418 490
    Export    6 147.156    43 196 606
Lithium chloride    Import    6 090.412    28 590 677
    Export    404.445    2 206 325
Lithium carbonate    Import    13 600.503    65 638 209
    Export    2 462.737    14 832 131


To meet needs in the development of the lithium-battery cathode material business and expand production capacity, Hunan Shanshan New Material Co., Ltd. established a wholly owned subsidiary, Hunan Shanshan New Energy Co., Ltd. in 2014. An investment of around RMB362 million was made in the construction of a 15 000 t/a cathode material production base in Ningxiang County, Jinzhou District of Changsha. Construction was started in 2014.
Product R&D in Beijing Easpring Material Technology Co., Ltd. is targeted at meeting market demand. While optimizing existing product design and accelerating technical upgrades, the company also vigorously promotes R&D of new products. The smooth trial production in the firm’s Jiangsu plant has further consolidated comprehensive advantages in the lithium-battery cathode material sector.
The first phase of the 10 000 t/a lithium-battery cathode material project of Jinchi Energy & Material Co., Ltd. (controlled by Kingray New Materials Science & Technology Co., Ltd.) operates a 3 000 t/a cobalt-covered spherical nickel hydroxide line and 3 000 t/a lithium-battery polybasic precursor materials line. The first phase started construction in May 2014 and was completed at the end of that year.
The lithium-battery material business of Xiamen Tungsten Co., Ltd. continued its stable growth in 2014. The business revenue was 30.26% higher than RMB700.51 million in 2013 and the company started to earn profits.
Qingdao Qianyun High-Tech New Material Co., Ltd. takes lithium manganate, lithium iron phosphate and ternary materials as cut-in points. The firm has formed 10 major product series with several dozen varieties. There are 14 large production lines. The sales volume of lithium manganate has held first place in China for three consecutive years. Output of lithium-battery cathode materials reached 8 000 tons in 2014.
Hunan Ruixiang New Material Co., Ltd. was established in May 2001. It owns more than 30 national invention patents and utility model patents. Product sales are increasing steadily at an annual rate of 30%. Output of lithium-battery cathode materials was around 8 000 tons in 2014.
Pulhead Technology Industry Co., Ltd. was jointly funded by Oriental Investment Co., Ltd. and Peking University in 1999. It is engaged in the R&D, production, sales and service of lithium-battery cathode materials and electric vehicle and energy-storage battery packs. A strategic pattern of the new-energy battery material industrial chain including a basic research center in Beijing, an engineering technology center in Beijing, lithium-battery cathode material production bases in Tai’an and Xining and PRIDE power battery assembly center in Beijing has been formed. Output of lithium-battery cathode materials was over 8 000 tons in 2014.
The present trend shows that listed companies and large enterprises need to expand both upstream and downstream and actively seek opportunities to align with excellent counterparts. Table 4 shows the sales revenues and profits of some listed companies.
4. Future development of the lithium sector
(1) Raw material: lithium mineral
China depends heavily on import for its supply of lithium mineral resources. The output of spodumenite concentrate in China was around 20 000 tons in 2014, but 330 000 tons was imported. Talison of Australia supplies spodumenite to China. Some enterprises import concentrated brine from abroad to produce lithium-based products such as lithium chloride.  
The operational scale of existing mines in China can not satisfy domestic enterprises’ demand for lithium raw materials.
(2) Growing demand for high-power lithium batteries
China made 5.29 billion lithium-battery products in 2014, the same as in the previous year, according to data released by the National Bureau of Statistics. The growth of volume in the high-power lithium-battery market was 30% in 2013. The proportions of lithium batteries sold for use in mobile phones and laptops in the first five months of 2015 were 2% and 4% lower, respectively, than in the same period of 2014, whereas the proportions for use in electric vehicles and energy-storage battery packs were 4% and 1% higher, respectively. With the emergence of new-energy vehicles, the demand for high-power lithium batteries will grow explosively.
(3) Growing demand for basic lithium salts and lithium-battery cathode materials
The constant promotion of numerous types of electric vehicles, the booming development of 3G and 4G networks and the extensive application of lithium-based products in mobile base station power sources, energy-storage batteries, high-power batteries and emerging markets will surely sustain the demand for lithium resources, basic lithium-based products and lithium-battery cathode materials. With the ongoing increase of electronic products, electric bicycles and energy-saving/new-energy vehicles, the output of basic lithium salts such as lithium carbonate and lithium-battery cathode materials will make a sustained increase. The total demand for lithium in China was 65 800 tons (converted to the equivalent amount of lithium carbonate) in 2014, an increase of 5% over the previous year. It is expected that the annual growth of demand continued to exceed 5% in 2015.