In January 2015, the Chinese government
officially raised the export tax refund rates for certain products, especially
including the main raw material for Li-ion battery electrolyte, LiPF6. Thus,
the exports of LiPF6 will be effectively supported and stimulated and it will
further accelerate the large-scale production and commercialization progress of
LiPF6 in China.
Source: Baidu
From 1 Jan., 2015, according to the Notice
on Adjusting the Export Tax Refund Rates for Certain Products jointly released
by the Ministry of Finance of the People’s Republic of China and the State
Administration of Taxation, the export tax refund rates for certain products
shall be raised. Specifically, the main raw material for Li-ion battery
electrolyte, lithium hexafluorophosphate (LiPF6), is included.
The export tax refund rates for these
products rises significantly. It gives supports to relevant enterprises,
stimulate the exports of related products and will alleviate the operation
pressure from severe overcapacity of certain products in China. It is
noteworthy that the overseas market may take the opportunity to undercut the
price, which may trigger a new export price war. Besides, relevant enterprises
should make enough preparation in advance, in order to deal with the
international trade friction brought by the tendency of trade protectionism in
the future.
According to CCM, the tariff regulations
and tariff items for LiPF6 were newly added in the 2015 Tariff Execution Plan
published by the General Administration of Customs of the People’s Republic of
China.
In recent years, due to the technological
breakthrough and production capacity expansion, along with the upstream and
downstream market not completely expanded and supply exceeding demand, the
price and the gross profit margin of LiPF6 in China began to decline from the
high monopolistic level. However, the rapid development of the alternative
energy vehicle industry in 2014 drove the overall development of Li-ion battery
and its upstream industry chain. The market of LiPF6 went down more slowly and
tended to be stable. After the adjustment, the export tax refund rate for LiPF6
increased from 0% to 13%. It is favorable to the LiPF6 upstream and downstream
industry chain.
In terms of the LiPF6 industry and its
upstream industry, the adjustment of export tax refund rates will strengthen
the competitiveness of enterprises regarding the exports of LiPF6 and stimulate
enterprises to explore the international market. What’s more, with the exploration
of the international market, the broadened marketing channel will also increase
the consumption of the production capacity and bring in more revenue. This will
attract LiPF6 enterprises and related upstream fluorochemical enterprises to
engage in developing LiPF6. In this way, the large-scale production and
commercialization progress of LiPF6 in China will continue to be accelerated.
As for the downstream industry of LiPF6,
with the increasing input, the technology and quality of the product will be further
improved and the gap between the imported raw materials and the domestic raw
materials will be narrowed. It can provide raw materials of high quality and
competitive price for the high value added power Li-ion battery that develops
in large scale. It will also be favorable to the reduction of the cost for
power Li-ion battery, so as to propel the further promotion of the alternative
energy vehicle industry.
In 2015, since the promotion of the
alternative energy vehicle industry will be accelerated, the Li-ion battery
industry, especially the high value added power Li-ion battery, will usher
large investment and development. This will drive the demand for electrolyte
rapidly and the LiPF6 industry will also usher an enormous development
opportunity. Specifically, the Chinese government will continue to make efforts
to achieve the goal that the accumulative quantity of production and sale for
battery electric vehicle (BEV) and plug-in hybrid electric vehicle (PHEV) will
reach 500,000 by 2015. Therefore, in 2015, with abundant government subsidy and
policy support, CCM predicted that the accumulative quantity of production and
sale for alternative energy vehicle in China was expected to increase from
100,000 in 2014 to 200,000-300,000 in 2015.
In addition, CCM believed the adjustment of
the export tax refund for LiPF6 would be a great help for China to continuously
expand its market share in the global LiPF6 and electrolyte market. At present,
the global production capacity of LiPF6 is about 12,000 t/a. On the basis of
the development trend of the downstream industry, the global demand for
electrolyte is estimated to reach approximately 100,000 tonnes in 2015.
According to the proportion of about 8:1, 12,500 tonnes of LiPF6 will be in
demand. Even according to the operating rate of 90%, the current production
capacity will not satisfy the global demand for LiPF6 in 2015. Meanwhile,
considering the global Li-ion battery industry status, Japan, South Korea and
China account more than 90% of the global production capacity of Li-ion
battery. Based on the cost advantage in China’s fluorochemical industry, the
large-scale production of LiPF6 is beneficial to the quantity improvement and
the price fall of electrolyte. Hence, the production capacity of electrolyte
will be transferred to and centralized in China. It is predicted that about
80%-90% of electrolyte in the world will be supplied by China.
As the important raw material for Li-ion
battery electrolyte, LiPF6 accounts for about 40%-50% of the cost of
electrolyte. Before 2011, since LiPF6 required advanced technology, China’s
LiPF6 industry did not develop in scale and relevant downstream products mainly
relied on imports from Japan. In the meantime, several Japan-based enterprises,
such as Stella Chemifa Corporation, Kanto Denka Kogyo Co., Ltd. and Morita
Chemical Industries Co., Ltd., occupied almost 90% of the global market share.
However, after 2011, with the technological breakthrough of domestic
enterprises, some domestic manufacturers, such as Do-Fluoride Chemicals Co.,
Ltd., Jiangsu Jiujiujiu Technology Co., Ltd., Tianjin Jinniu Power Sources
Material Co., Ltd. and Guangzhou Tinci Materials Technology Co., Ltd., rapidly
expanded their production capacity for LiPF6 and successfully broke the
monopoly of Japan-based enterprises on Chinese market.
About
CCM:
CCM is the leading market intelligence
provider for China’s agriculture, chemicals, food & ingredients and life
science markets. Founded in 2001, CCM offers a range of data and content
solutions, from price and trade data to industry newsletters and customized
market research reports. Our clients include Monsanto, DuPont, Shell, Bayer,
and Syngenta. CCM is a brand of Kcomber Inc.
For more information about CCM, please
visit www.cnchemicals.com or get in
touch with us directly by emailing econtact@cnchemicals.com or calling +86-20-37616606.
Tag: LiPF6