High-nickel ternary cathode materials to lead the market

Asian Metal: Mr. Zhao, thank you for accepting Asian Metal's interview, would you please briefly introduce your company?

Mr. Zhao: Relying on the sustained and stable supply of primary ore from large state-owned enterprises, our group company has developed businesses in the fields of metallic chemical materials and new battery materials. Shunying Material, with an annual capacity of 5,000t, is mainly engaged in the production of ternary material precursors of various specifications such as NCM523, NCM622, NCM811 and NCA. With regard to the sources of raw materials, we have two production lines with independently-developed all-hydrometallurgy for both common ores and raw materials which are difficult to process. Thanks to the advanced technology, low production costs and broad applicability for raw materials, those two production lines can guarantee the source of raw materials for the production of ternary material precursors with an annual processing capacity of 3,000t.

Asian Metal: With the gradual development of the new energy market, the demand from both downstream cathode material and battery companies increases. So, does your company have any plan to expand production in 2018?

Mr. Zhao: Although we could produce ternary material precursors at full capacity in 2017, we only arranged production based on the downstream demand. We plan to expand our annual capacity to 20,000t in 2018 and 100,000t in next five years.

Asian Metal: As far as I know, your company has nickel and cobalt smelting production lines. However, prices for raw materials of cobalt metal keep rising currently and are widely expected to go on climbing in the near future, what do you think of that? And as a downstream company, is your company under pressure? What strategies will your company adopt to control costs?

Mr. Zhao: With development of the new energy vehicle market, we believe that it is inevitable that prices for cobalt metal and nickel cathode will increase significantly. And the rise in cobalt metal and nickel cathode prices will shore up the downstream precursor, cathode material, battery and automobile industries. Actually, the high cobalt metal prices and high demand for energy density of the materials have already had some effects on downstream markets. Market players start to focus on development of high-nickel ternary materials currently and the majority of orders our company received moving towards the end of the year are for NCM 622. Consequently, we will mainly produce high-nickel ternary material precursors such as NCM 622 and ternary material precursors of large monocrystalline in 2018. As a downstream company, we are under huge pressure, but we believe that the industry will turn better as a result of self-regulation and market conduction. In terms of cost control, we mainly focus on optimizing the production technique of wet-process smelting, strengthening automatic control and delicacy management, improving R & D capabilities and cooperating with research institutes, so as to reduce production costs and enhance market competitiveness.

Asian Metal: Nickel cathode prices fluctuated greatly in the Chinese market in 2017. Currently, nickel cathode prices moved down as a result of higher USD interest rates, but nickel sulfate prices stay at high levels. There will be newly-added nickel sulfate capacity in China in 2018, and will your company purchase raw materials from the market?

Mr. Zhao: At present, market players are paying more attention to the control of raw materials. The supply of raw materials for nickel cathode is more adequate than that for cobalt metal. Our company has a stable source of raw materials for nickel cathode and cobalt metal in Panxi and Guizhou, and thus there is no need to purchase extra raw materials from the market. Meanwhile, our company is planning to build a lithium battery recycling project to recycle nickel, cobalt and other metals from disused batteries, which will be a supplement to our raw materials.

Asian Metal: Many suppliers and demanders enter into a cooperation relationship to reduce costs amid rising raw material prices and sluggish downstream demand. Would your company follow the trend?

Mr. Zhao: Yes, we have considered about it. As for raw materials, we are actively deepening and strengthening the cooperation with overseas upstream companies which own nickel and cobalt mines to control resources from the aspect of raw materials. In terms of products, although the new energy vehicle market drives the ternary material industry to develop rapidly, our company focuses firmly only on precursors, and thus we would consider strategic cooperation with downstream cathode material and battery companies to enhance our company's market position.

Asian Metal: As the core of the ternary cathode material, the quality of ternary material precursors is more important. The new energy policy requires higher energy density, so will your company adjust production lines to enhance competitiveness?

Mr. Zhao: The new energy automotive industry is expected to become a new driving force for global economic growth, leading to higher demand on the energy density of power batteries. Compared with traditional lithium iron phosphate materials, ternary cathode materials, especially high-nickel ternary cathode materials, have higher energy density and thus are the mainstream of future technology development. Our company currently mainly produces NCM 523 and NCM 622. We have completed the process optimization of NCM 811, NCA, as well as special precursors such as large monocrystal precursors and have received favorable feedback for samples from downstream companies. Our company can mass-produce immediately upon downstream demand with the development of the market. And most importantly, we have the ability and confidence to guarantee the output and quality. In terms of competitiveness, in addition to the advantages of raw materials and hydrometallurgy production lines, our company also makes use of its own research and development team and research institutes to optimize the production process to reduce costs and improve product quality to enhance our company’s competitiveness.

Asian Metal: The 622 material will prevail in the market in 2018. You just mentioned that your company has realized mass production for the material, then what about the output?

Mr. Zhao: We have started mass production for NCM 622 and plan to produce 200t per month initially.

Asian Metal: What do you think of prospects of the precursor, anode material and battery markets in 2018?

Mr. Zhao: On the whole, the booming cycle of new energy vehicles will continue to drive demand for ternary cathode materials to grow rapidly. Of course, it is an inevitable trend that declining battery prices will force raw material to move down. As a "link" connecting the upstream and downstream companies, we take full advantage of the advantages of hydrometallurgy. As for raw materials, we acquire them through the way of joint venture and cooperation; in terms of production, we optimize the production process, strengthen the automatic control and deepen research to enhance the quality, reduce accident and cut production costs. We believe that Shunying Material will have an irreplaceable status in the new energy market in the future.

Asian Metal: Thank you again for accepting the interview and wish your company a prosperous future!