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China receives 80% of industry investment as it triples lithium-ion production

Fri, 05/27/2016 - 10:06 -- Paul Crompton
China receives 80% of industry investment as it triples lithium-ion production

Strong growth in China’s lithium-ion industry meant around 80% of global new investment was located in the country during 2014, a new report has highlighted.

As 25 lithium-ion battery projects sprang up in the country in 2014 more than RMB100 million ($15.25million) was invested in China’s lithium-ion industry, stated the report by CCM, a market intelligence provider for China.

And growth did not end there, as domestic output of lithium-ion battery power increased to 15.7GWh in 2015, triple the previous year.

From 2010-2015 China’s electrochemical energy storage market grew at the CAGR of 110%, six times higher than the global output, said the report.

From 16 to 18 May, 2016, nearly RMB2.6 billion ($396.5million) went into the lithium-ion battery market, with Tianqi Lithium, Ganfeng Lithium and GEM Co investing the most into the market.

The reported stated: “Thanks to the price increasing of the upstream raw materials and rising sales volume of the downstream products, most of the lithium-ion battery listing companies recorded great growth in both its revenues and net profits.”

The level of investment was helped by Korean firms such as Samsung SDI and LG Chem focusing on developing lithium-ion battery in China.

In the case of Samsung SDI, a subsidiary of Samsung Group, it stopped making fuel cells this year to focus on developing its lithium-ion output.

The report quotes a Samsung SDI spokesman as saying this was due to the fuel cell market’s ‘bleak future’ as decreasing production costs meant the technology could no longer contend with lithium-ion.

Samsung is due to invest KRD1 trillion ($839million) in lithium-ion batteries this year, up 40% compared to 2015. Some of that cash will be invested in current manufacturing plants and construction of manufacturing facilities in Europe.

As the market for batteries grew then so did the need for materials as China’s Ningbo Shanshan, which supplies electrode materials, electrolyte, and separators for lithium-ion batteries, posted big profits.

According to its 2015 annual report its net profit was up 90.81% YoY, which was attributed to the rising price of cathode material in the fourth quarter of 2015.

CCM’s Market and Development Trend of Li-ion Battery in China, 2016-2020 report is due to be published in 17 June.