Leading chemical company invested 18.684 billion RMB in lithium project

The subsidiary of Eastern Shenghong invested in the iron phosphate material project

On November 29, 2022, Eastern Shenghong announced that Haigus New Energy plans to invest in the construction of supporting raw materials, iron phosphate and lithium iron phosphate new energy materials projects for lithium ion battery, with a total investment of 18.684 billion RMB and a construction period of two years.

Haigus New Energy is the secondary holding subsidiary of Eastern Shenghong. The purpose of the plan is to speed up the layout of new energy and new materials and further enhance the comprehensive competitive strength of the company.

The announcement shows that the Haigus New Energy supporting raw materials, iron phosphate, lithium iron phosphate New Energy materials project is planned to be built in Yidu Chemical Park, Yichang City, Hubei Province, China, with a land area of about 162.60 hectares. The construction content and scale mainly include:

● 1.8 million t/a concentrator
● 800000t/a sulfur based sulphuric acid plant
● 400000 t/a wet phosphoric acid plant
● 280 thousand tons/year wet phosphoric acid purification unit
● 500000 t/a iron phosphate plant
● 300000 t/a lithium iron phosphate device
● 100000 t/a water soluble fertilizer unit
● 500000 t/a special compound fertilizer plant
● 2 million tons/year phosphogypsum harmless treatment unit
● 1 million t/a subgrade material device
● 1 million t/a cement retarder device
● 20000 t/a anhydrous hydrogen fluoride unit

In addition, it also includes supporting warehouses and utilities. It is estimated that the project can achieve an annual sales revenue of 56.146 billion RMB and an annual total profit of 3.375 billion RMB.

Shenghong will lay out the whole industrial chain of lithium iron phosphate

Eastern Shenghong is a core listed subsidiary of Shenghong Group, a Fortune 500 company, mainly engaged in oil refining, petrochemical, civil polyester filament, new energy materials and other industries. It has established industrial bases in Lianyungang, Suzhou, Suqian and other places in China.

It is worth noting that Shenghong Group will focus on the development goals of new energy and new materials industries, and take lithium battery and energy storage system as the core to build a complete industrial chain from materials, cells, modules to terminal products.

On the morning of October 29, 2022, Shenghong’s energy storage headquarters project was located in Wujiang District, Suzhou City, Jiangsu Province, China. The planned production capacity of the project is 50GWh, which will be constructed by stages with a total investment of 20 billion RMB.

In the first phase, the 16GWh new lithium-ion energy storage battery project will be constructed, with an investment of 12.5 billion RMB. After completion, the profits and taxes will be nearly 3 billion RMB.

Lithium battery materials, as the power battery materials of new energy vehicles and the core of electrochemical energy storage, will play an extremely important role in the wave of industrialization of new energy vehicles.

As the current positive energy storage material for power and energy storage batteries, lithium iron phosphate has obvious comprehensive advantages, outstanding safety performance and cycle life advantages, and has become the preferred positive material for new automotive power batteries and energy storage batteries.

Based on the continuous empowerment of its own large chemical platform and years of accumulation in the development of new materials, Eastern Shenghong will focus on new energy and new materials, lay out the whole industrial chain of lithium iron phosphate, and comprehensively create a new energy green factory.

With phosphate rock as raw material, the project will build a full industrial chain product from phosphate rock to lithium iron phosphate. Purified phosphoric acid will be used as raw material of iron phosphate to further produce lithium iron phosphate. At the same time, water-soluble fertilizer and special fertilizer will be used to promote the development of new energy materials industry in a circular economy development mode.

It will actively expand the scope of industry, extend the industrial chain, promote the supporting development, cluster development and coordinated development of downstream industries, and realize the continuous appreciation of resource value.

Lithium iron phosphate is one of the most widely used cathode materials in lithium batteries, and iron phosphate is the key and core precursor raw material for manufacturing battery grade lithium iron phosphate.

In May 2021, the monthly output of lithium iron phosphate batteries in China exceeded that of ternary lithium batteries for the first time. At the same time, the installed capacity of lithium iron phosphate battery continued to exceed that of ternary lithium battery.

In October this year, China’s power battery load was 30.5 GWh, a year-on-year increase of 98.1%; From January to October, the cumulative loading volume was 224.2GWh, with a year-on-year growth of 108.7%.

At the same time, the price of lithium iron phosphate is also rising. The data shows that as of November 29, the average price of lithium iron phosphate of China’s power type premium product was 170000 RMB/ton. In November, the market price of lithium iron phosphate rose by 3.03% as a whole, slightly higher than that of the same period last month.

Many battery companies have expanded their production of lithium iron phosphate

Under the pressure of huge demand and cost, many battery companies have expanded their production of lithium iron phosphate and iron phosphate.

Wanrun

Wanrun is one of the top 10 lithium iron phosphate materials companies in China. On the evening of November 10, 2022, Wanrun signed a cooperation agreement with Fang County People’s Government of Shiyan City and Baokang County People’s Government of Hubei Province, China.

According to the agreement, Fang County People’s Government and Wanrun plan to jointly invest in the construction of new energy materials and circular economy industrial park project, including lithium iron phosphate, iron phosphate, phosphate salt, phosphoric acid, phosphate rock and other integrated industrial chain materials. The project covers an area of about 1612 mu.

Yuntianhua

On November 16, Yuntianhua released the plan for non-public issuance of A-shares in 2022. The proposed capital raised by this non-public issuance of shares will not exceed 5 billion RMB, which will be used to invest in the construction of 200000 t/a iron phosphate project for new energy gathering materials and so on.

On the evening of September 29, Yuntianhua announced that the company and Huayou Holding Group planned to promote the construction and operation of 500000 t/a iron phosphate project and 500000 t/a lithium iron phosphate project through the cooperation of iron phosphate and lithium iron phosphate industry.

Lopal

On November 29, Lopal said that it would jointly invest and build 30000 tons and 70000 tons of lithium carbonate projects with TangShan XinFeng and Yichun Shidai New Energy respectively.

Lopal also disclosed that the company’s projects with an annual output of 50,000 tons of lithium iron phosphate and 50,000 tons of iron phosphate in Shandong Province, China, are expected to be completed and put into operation by the end of this year.

The first phase of the lithium iron phosphate project with an annual output of 150000 tons in Sichuan, China, has been completed and put into operation.

According to statistics, the newly planned production capacity of iron phosphate and lithium iron phosphate exceeded 4 million tons in 2021. In 2022, lithium iron phosphate will continue to grow at a high speed. By 2025, the global demand for lithium iron phosphate will reach 1.81 million tons.

However, the crazy expansion of the company will bring fierce competition in the field of lithium iron phosphate/iron phosphate, and the industry may face the risk of overcapacity.