Demand for LiPF6 on an upward trend 08-04-2021

Summary: No matter LiPF6 price will continue to rise or turn to fall in future, market demand for LiPF6 will undoubtedly remain an upward trend driven by the rapid development of alternative energy vehicle industry as well as favourable national policies.

As demand for alternative energy vehicles surges, li-ion battery market is booming, setting demand for lithium hexafluorophosphate (LiPF6) on a path to fast growth. At present, LiPF6 industry has increasingly scaled up with production capacity  gathering around leading enterprises while small-sized businesses have gradually retreated from the market competition after suffering poor profits at the period of  Q2 2017–Q3 2020, the last-time downward phase of LiPF6 price. With production capacity concentrated in the hands of leading enterprises all the more, cyclical fluctuations of LiPF6 price will give way to prospective growth, a stage featuring stable profits and rising demand.

Statistics show that at the period of 2015–Q1 2017, LiPF6 price remained quite high levels, once even peaking at over USD61,815.20/t (RMB400,000/t). There were two core contributing factors to such high prices of LiPF6 at that period. For one thing, with policy support, alternative energy vehicle industry then embraced a market boom, prompting automotive battery producers to mushroom; domestic market at that time, however, had little access to high-quality LiPF6, resulting in soaring prices of LiPF6 in a short time. For another, lithium carbonate, the essential raw material for producing LiPF6, was also experiencing burgeoning demand then, and consequentially soaring prices of the upstream raw material began to shift cost pressure to the downstream product. Nevertheless, what followed were that alternative energy vehicle subsidy lowered, large quantities of battery plants collapsed, growth rate of demand in the downstream market fall within reasonable levels, and emerging battery plants released more and more production capacity. These multiple factors collectively forced LiPF6 product to be stuck at a lasting downturn period of Q2 2017–Q3 2020.

Nowadays, alternative energy vehicles are making a comeback and the subsequent great demand for battery electrolytes will directly push up the demand for LiPF6. Besides, the outdated production capacity of LiPF6 left from the long downturn period is being cleared out gradually while production capacity of LiPF6 and orders in the market are increasingly flowing to several top enterprises, with short of LiPF6 supply becoming a commonplace. The bright market prospects for LiPF6 are predicted to prevail in the whole year of 2021.

Industry insiders pointed out that LiPF6 price has currently been quoted at over USD54,088.30/t (RMB350,000/t) and is still following an upward trend. Its future price is estimated to rise to USD61,815.20/t (RMB400,000/t), close to the record high in 2016. Yet Guangzhou Tinci Materials Technology Co., Ltd. said when responding to a recent market research, that the current rising prices of LiPF6 were the result of the intense relation of supply and demand, and that future price of LiPF6 might face some risks to fall with capacity expansion stepping up in the industry.

But no matter LiPF6 price will continue to rise or turn to fall in future, what is indisputable is that market demand for LiPF6 will remain an upward trend driven by the rapid development of alternative energy vehicle industry as well as favourable national policies.


More information you can find at CCM Li-ion Battery China Newsletter.

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