Argus Media Limited

09/06/2021 | News release | Distributed by Public on 09/06/2021 12:16

China to strengthen supply chain for key battery metals

The Chinese government will further boost its supply guarantee system for lithium, cobalt, nickel and other key materials to support rapid developments in the country's new energy vehicle (NEV) industry.

'The cost of new energy vehicles is still high and the safety, reliability and convenience of use need to be further improved, and the current power battery recycling channel remains not smooth enough,' said Xin Guobin, vice-minister of China's ministry of industry and information technology (MIIT), at the 17th China Automobile Industry Development (Teda) International Forum.

China's NEV sales and output are each expected to have exceeded 170mn units over the eight months of this year, up by 100pc from a year earlier, with NEVs accounting for more than 10pc of the country's new vehicle registrations during the period, Xin said.

'China has made new progress in the innovation of power battery technology this year. For example, fast-charging technology can increase the battery range by 200km in just five minutes of charging. The energy density of our sodium ion battery has reached 160Wh/kg and has made a breakthrough in industrialisation,' Xin added.

China's largest power battery manufacturer CATL unveiled its new sodium-ion batteries on 29 July, expecting to build an industrial supply chain by 2023. CATL's sodium-ion batteries have high-energy density, fast-charging capability, strong thermal stability and low-temperature performance, as well as high-integration efficiency, according to the company.

'As the global NEV industry continues to expand, the industry is also facing pressure from rising prices for key resources and raw materials such as lithium, cobalt and nickel. With continuous expansions in the automotive market, supply squeezes in the resource and feedstock markets will become more prominent in the future,' Xin said.

The relevant government departments should strengthen cooperation and maintain continuous, stable and effective coordination of supporting policies to further improve the supply guarantee system for key resources and materials such as lithium, cobalt and nickel, he added.

Demand for some key battery metals and materials has surged this year as national governments accelerate electrification of vehicles. Electric vehicle (EV) sales of 800,000 in the first half of 2021 in Europe accounted for 15pc of the region's automotive market, up by over 100pc from a year earlier. The US has also stepped up efforts to promote EVs after President Joe Biden on 5 August signed an executive order setting a voluntary goal for 50pc of cars and trucks sold in the US by 2030 to be electric, plug-in hybrids or fuel-cell vehicles.

Prices for battery metals have risen sharply since the beginning of this year. Argus last assessed prices for 56.5pc grade hydroxide, a main feedstock for power batteries, higher by 174pc from the start of this year at 130,000-136,000 yuan/t ($20,140-21,070/t) ex-works on 2 September. Lithium resources are globally abundant, but current exploitation output is insufficient to meet rapid growth in demand from the EV and energy storage sectors.