Friday, July 22, 2011

Lithium Supply: Competition draining Japan's hold on battery materials market ilc.v, tnr.v, czx.v, cgp.v,, lmr.v, rm.v,,,, jnn.v, abn.v, ura.v, mxr.v, tsla, res, mcp,, quc.v, cee.v, sqm, fmc, roc, li.v, wlc.v, clq.v, lit, nsany, byddf, gm, dai,, hev, aone, vlnc

  Lithium and Rare Earths are at the heart of the technological revolution today and they will be the basis for the new industrial revolution based on Energy Transition from fossil fuels. Electrification of the transportation will lead the way and provide new investment opportunities.
  All major industrial players are busy making M&A deals in the lithium space in order to secure supply of the critical materials in the future. Korean and Chinese companies are coming very aggressively into Lithium sector as well now.

"With Euro area coming out of coma and US Debt ceiling potentially being lifted Crude Oil is already hitting above 100 dollars today. IEA has announced that there is No Plans about second Oil release and that the previous one is now helping the market supply. Our Lithium plays will be picking up next with the risk coming back on the table."

Competition draining Japan's hold on battery materials market


With demand for energy-dense lithium-ion batteries climbing worldwide, Japan's materials makers are facing tougher competition from China and South Korea, loosening their grip on the industry's top spot.

In response, many companies are gearing up to raise production ahead of an expected surge in demand for electric vehicles and hybrid cars.

On July 20, Kureha Corp. President Takao Iwasaki announced that his company, in cooperation with trading house Itochu Corp., plans to set up new materials factories in Japan and the United States by 2013 with a total investment of 10 billion yen ($127 million).

"Lithium-ion will dominate the battery market of this century. We hope to control that market with Japanese materials," Iwasaki told a news conference.

Kureha now holds a 70 percent share in the international market for adhesives for cathode materials, a principal material used to make lithium-ion batteries.

It also aims to grab a 20 percent share by 2015 in the market for anode materials, another crucial material for lithium-ion batteries.

The other main materials used in lithium-ion batteries are electrolytes and separators.

The batteries generate electricity when ions travel between the cathodes and anodes. Lithium-ion batteries have much larger capacities than nickel-hydride batteries.

At present, lithium-ion batteries are mainly used in mobile phones and personal computers, and the lithium-ion battery market is worth around 1 trillion yen. Japanese materials makers are the top suppliers in many markets.

These makers are also keeping a sharp eye on the market being generated by next-generation vehicles in development at Toyota Motor Corp., Nissan Motor Co. and other carmakers.

The overall market for lithium-ion batteries, including for products other than cars, is expected to grow to somewhere between 5 trillion yen and 8 trillion yen by 2020. To prepare for rapid expansion, Japanese materials makers are accelerating advance investments in production.

Showa Denko KK currently occupies 50 percent of the market for aluminum-laminated films used to encase batteries. On July 19, the company unveiled a plan to expand its production of anode materials by spending 3 billion yen. It also said that it will make inroads into the electrolyte market by 2013.

Ube Industries Ltd., now the world's top producer of electrolytes, announced July 6 it will establish its first overseas production base in the United States in 2012 in a joint venture with U.S. chemical maker Dow Chemical Co. Using Dow's sales networks, Ube Industries aims to sell its products to U.S. carmakers.

Asahi Kasei Corp., the world's largest producer of separators, also plans to increase production by spring 2013 through additional investments of 6 billion yen in its factories in Miyazaki Prefecture.

Japanese materials makers have secured a market share by earning the trust of clients by providing high-quality products. But the rising tide of competition is spurring them to hurry along their investments.

Battery makers, which rely on materials manufacturers, are already losing their market shares.

According to Techno Systems Research Co., South Korean makers grabbed 38 percent of the world market for lithium-ion batteries on a shipment basis in the January-March quarter of 2011, matching that of Japanese manufacturers for the first time.

By maker, South Korea's Samsung SDI Co. topped Japan's Sanyo Electric Co. in the April-June quarter of 2010, and has since held onto the top position.

Even more of a concern, "about 1,000 materials makers have emerged" in China, said an industry source.

South Korea's LG Chem Ltd., the world's third-largest lithium-ion battery producer, has begun to produce materials by itself.

A price war has already erupted in the lithium-ion battery materials market for mobile phones.

Showa Denko says the average price of anode materials per kilogram has shrunk by half from the 2,000 yen of two years ago.

Hitachi Chemical Co., the world's largest producer of anode materials, announced in June it will set up a new factory in China, the country that produces graphite, the raw material for anodes. The move apparently is aimed at reducing production costs.

Will a similar battle take place in the market for materials to make lithium-ion batteries for electric and hybrid vehicles?

"In the market for cars, where demand for safety and high quality is especially strong, Japanese makers' dominance will continue for the time being. But, as some materials become usable in both mobile phones and cars, their use will spread. That will force Japanese makers to strengthen their price competitiveness," said Shinobu Takeuchi, a SMBC Nikko Securities Inc. researcher."
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