By Xu Chenxi, China National Chemical Information Center

Cathode materials, anode materials, diaphragms and electrolyte materials needed in the manufacturing of lithium ion cells are called 4 key materials for lithium ion cells. The performance of diaphragms determines the interfacial structure and the inner resistance of cells and directly influences properties of cells such as capacity, recycling and safety.
   There are around 50 diaphragm producers in China today. By the end of 2017 the capacity already put on stream reached 3 000 million m2/a. The output of diaphragms was 1 440 million m2 in 2017, an increase of over 30% over the previous year.
   For long years China has mainly produced low-end dry-process diaphragms. The wet-process technology has however made a rapid development in recent years. Various enterprises have added wet-process production lines to meet the brisk demand of wet-process diaphragms in downstream new energy power cells. Wet-process diaphragms are gradually replacing dry-process diaphragms and have gained more and more extensive applications in the power cell sector.
   Wet-process diaphragms produced in Shanghai Enjie New Material Technology Co., Ltd. and Shenzhen Senior Technology Material Co., Ltd. were already approved by Samsung and LG in 2017 and started to make large-scale export. Cangzhou Mingzhu Plastic Co., Ltd. that mainly produced dry-process diaphragms in the past started to produce wet-process diaphragms in 2017. Table 1 shows the diaphragm producers in China in 2017.

Table 1    Diaphragm producers in China, 2017

Production raw materials mostly depend on import

   Raw materials for lithium cell diaphragms are PP and UHMWPE. The raw material for the production of dry-process cell diaphragms is a special-grade PP. Dry-process diaphragm producers in China mainly use raw materials imported from abroad. The most important supplier is KPIC of Korea. Raw materials produced in China have also started to develop in recent years, but they have a considerable gap with raw materials from KPIC in quality and stability and can only be used to produce low-end diaphragms.
   The raw material used in the production of wet-process diaphragms is UHMWPE. It is a special material. The raw material is also in a state of monopoly by imported raw materials and the price has always been kept at a high level. Major producers in the world include Celanese of the United States, KPIC of Korea and Mitsui of Japan. Yangzi Petrochemical Co., Ltd. mastered the production technology for diaphragm-grade UHMWPE in 2016, but by now no product has yet been put in market.

Shares held by 3 major consumption sectors make some changes

   Lithium cell diaphragms have 3 major application sectors, namely power cells, 3C consumer cells and energy storage cells.
   Power cells are used in new energy vehicles, electric tools, electric bicycles, aviation/spaceflight and medical care. The consumption sector is the main drive to the consumption growth of lithium cell diaphragms. Pushed by the stimulus and support of state policies, the consumption proportion of lithium cell diaphragms in the new energy sector already went up from 15% in 2012 to 55% in 2017.
3   C consumer cells are used in traditional 3C digital products such as mobile phones, laptops and tablet personal computers and new products such as navigation kits and wearable devices. The consumption proportion of lithium cell diaphragms in this sector is around 40%. As 3C products have entered a matured period, the output and the demand of consumer lithium cells are balanced and the growth is slowed down. The output of laptops will tend to be stable in future and the sales amount of tablet personal computers will make a further reduction.

   The demand of lithium cell diaphragms in energy storage cells is relatively small and the consumption proportion is around 5%. The market demand of energy storage cells is going up today, but the consumption proportion is basically the same as previous years. With the progress of technologies, the improvement of processes, the gradual cost price reduction of lithium cell diaphragms, the increase of photovoltaic and wind power installed capacities and the accelerated construction of energy storage power stations, the market demand of energy storage lithium cells will present a trend of rapid growth.

The domestic demand will likely be satisfied and the export will start to be made in 2020

   The consumption of lithium cell diaphragms in China was 376 million m2 in 2012 and increased to 1 400 million m2 in 2017 with a CAGR of 30% during 2012-2017. It is expected that the consumption of lithium cell diaphragms will reach 2 940 million m2 in 2022 and the CAGR will be 16% during 2017-2022.
   Lithium cell diaphragms are in a period of rapid development in China. With the upgrading of the production technology level, the import dependence of diaphragms is getting smaller in recent years. The percentage of imported diaphragms in the total diaphragm consumption was reduced from 30% in 2015 to 10% in 2017. Dry-process diaphragms produced in China are already self-sufficient today. Imported diaphragms are mostly high-end wet-process varieties and wet-process coating varieties. It is expected that with the upgrading of production technology and the rapid expansion of the capacity the consumption proportion of lithium cell diaphragms in China in the world total will reach 60% in 2020. All-round localization will be achieved and export will also start to be made.

Market competition leads to price drop

   As competition in the diaphragm market is getting fiercer, the price has presented a declining trend in recent years. In 2013 the average price of dry-process diaphragms was RMB4.0/m2 and the average price of wet-process diaphragms was RMB6.2/m2. In 2017 the price of dry-process diaphragms was around RMB2.5/m2 and the price of wet-process diaphragms was around RMB3.0/m2. A considerable price drop was made.
   Pushed by the demand of downstream power cells, the production of lithium cell diaphragms and especially wet-process diaphragms in China has made rapid advances in recent years. Wet-process diaphragms with excellent properties are replacing traditional dry-process diaphragms and marching towards the new energy sector. Nevertheless, dry-process diaphragms retain some advantages irreplaceable by wet-process diaphragms. Dry-process diaphragms will still firmly hold a certain market share in future.
   Various lithium cell diaphragm producers have expanded their capacities. The total capacity is already in surplus today. The capacity of lithium cell diaphragms in China will make another increase of 2 000 million m2/a in 2018. Competition will be fiercer in future, the market concentration degree will be higher and the export proportion will also go up.