Electrolyte Market Soars on Lithium Cells’ Coattails

By Chen Youwei, China National Chemical Information Centre

Production

Lithium cells are classified into three main types – 3C cells (meaning Computer, Communication and Consumer – for mobile phones, tablet personal computers, laptop computers, electric tools and other consumer electronics), power cells (for electric bicycles and new-energy vehicles) and energy storage cells (for capturing wind/solar generated power and for backup power sources).
Owing to rapidly increasing sales of power lithium cells, China’s overall output of lithium-ion cells reached around 63GWh in 2016. The domestic market for lithium cell electrolytes is highly concentrated: ten of China’s 60 producers control over 85% of the market. The capacity to make lithium cell electrolytes in China amounted to 140kt/a in 2016 and the output was 98kt, 58% of the world’s total.

Table 1   Consumption of lithium cell electrolytes in China, 2016

    Output (GWh)    Consumption of electrolytes (kt)    Consumption proportion (%)
3C lithium cells    28.6    39    42
Power lithium cells    29.5    45    49
Energy storage lithium cells    4.5    9    10
Total    62.6    93    100


Power lithium cells: major driver of development

Domestic demand for 3C lithium cell electrolytes was around 39kt in 2016. In the “new-energy vehicle” sector, 517 000 vehicles were made and 507 000 were sold, YoY increases of 51.7% and 53%, respectively. Power lithium cell production grew most rapidly, much faster than the other two types, making 29.5GWh in 2016, surpassing 3C cells for the first time, and moving ahead in sales as well. Demand for power lithium cell electrolytes was around 45kt in 2016. Demand for energy storage lithium cell electrolytes was around 9kt in 2016. The total consumption of lithium battery electrolytes in China was around 93kt in 2016.
The growth of demand for 3C lithium cells will surely slow down in the foreseeable future. Demand for power lithium cells, on the other hand, will grow rapidly to become the biggest driver for the further development of lithium cells in the next few years. Due to holdups in both technology and policy, energy storage lithium cells are still just entering the market, but have huge potential for development. Table 1 shows China’s consumption of lithium cells electrolytes by cell type in 2016.

Table 2   Output of 3 types of lithium cells in China, 2011-2021 (GWh)

    2011    2012    2013    2014    2015    2016    2021    2011-2016 CAGR (%)    2016-2021 CAGR (%)
Energy storage cells    0.60    0.80    1.50    2.10    3.40    4.5    19.9    49.6    34.6
Power cells    0.65    1.05    1.42    4.4    16.9    29.5    137.8    114.5    36.1
3C cells    12.25    15.15    19.88    23.4    26.4    28.6    59.6    18.5    15.8
Total    13.5    17.0    22.8    29.9    47.0    62.6    217.2    35.9    28.2


Prospect

Consumption of 3C lithium cell electrolytes in China grew 19% during 2010-2016. Output growth of older battery-powered products such as simple mobile phones and laptop computers has slowed down in the last two years, while output of smartphones and tablet computers is growing quite rapidly and the demand for lithium-ion cells is increasing along with it. The market for 3C electronics will likely maintain this overall rising trend for some time to come. So demand for 3C lithium cell electrolytes is expected to grow around 15% annually for the next 5 years.
As detailed above, the market for new-energy vehicles is booming in China, with output growing 131% annually on average during 2011-2016. Commensurately, consumption of power lithium cell electrolytes grew 115% annually in those years. According to the “Notice of the State Council on Issuing the Planning for the Development of the Energy-Saving and New Energy Automobile Industry (2012-2020)”, China will be able to make 2 million all-electric vehicles and plug-in hybrid electric vehicles per year by 2020. New-energy vehicle output in China will likely grow around 40% annually during 2016-2021. Domestic demand for power lithium cell electrolytes is therefore expected to grow around 34% annually during 2016-2021.

Table 3   Demand for 3 types of lithium cell electrolytes in China, 2011-2021  (kt)

    2011    2012    2013    2014    2015    2016    2021    2011-2016 CAGR (%)    2016-2021 CAGR (%)
Energy storage cells    1    2    3    4    7    9    32    54.6    29.7
Power cells    1    2    3    9    33    45    189    103.0    33.7
3C cells    17    20    26    30    34    39    78    18.7    14.9
Total    19    24    32    43    74    93    299    37.4    26.6


Energy storage lithium cells are used mainly in power generation equipment, communication equipment and energy storage facilities in households, hospitals and shopping malls. Output of energy storage lithium cells grew 50% annually on average during 2011-2016, and annual consumption of electrolytes for them grew 55% annually on average. After 2020, the “industrial energy storage” market, driven by energy storage in power grids and individual households, will provide even greater development opportunities for lithium-ion cells.
Table 2 and Figure 1 portray the market for the three major types (3C, power and energy storage) of lithium-ion cells in China during 2011-2021.
Accelerated domestic production of the key electrolyte lithium hexafluorophosphate will enable China to fully meet its domestic electrolyte demand. Table 3 and Figure 2 show the demand for lithium cell electrolytes in China during 2011-2021.