Lithium-ion battery separator shipments are rebounding, but key lithium battery technologies need improvement. The rapid development of new energy vehicles and the explosive growth in demand for power lithium batteries are driving a steady increase in separator demand, particularly in the domestic market for wet-process separators that match high-energy-density lithium batteries. As a crucial component of lithium-ion batteries, lithium battery separators account for 5-10% of the total cost of lithium battery materials. The rebound in lithium-ion battery separator shipments highlights the need for further improvements in key lithium battery technologies.
Lithium-ion battery separator shipments rebound
From 2017 to 2018, China's domestic separator industry made significant progress in production capacity expansion, cost reduction, and technological advancement. In terms of volume, my country continued to hold the top spot in the global lithium-ion battery separator market in 2018. Regarding customer structure, domestically produced separators have been continuously replacing imported ones in the Chinese market, reducing their market share. Furthermore, domestically produced separators have achieved large-scale exports, with export volume continuing to rise, reflecting the technological advancements in domestic separator manufacturing.
In terms of market competition, in the early days when lithium-ion batteries were mainly used in 3C products, the supply of these products was largely controlled by overseas manufacturers, creating constraints on the supply chain. As a result, the domestic lithium battery separator market was dominated by imported products for a long time. In 2009, my country began to vigorously develop the new energy vehicle market, leading to a rapid increase in demand for lithium battery separators, especially for power lithium battery separators. Furthermore, due to domestic subsidy policies, overseas battery manufacturers were largely unable to enter the supply chains of domestic automakers.
According to statistics, in 2014, the domestic shipment of lithium-ion battery separators in my country was only 450 million square meters, but by 2018 it had reached 2 billion square meters, an increase of 39.37% year-on-year, corresponding to an installed capacity of nearly 100 GWh for lithium-ion batteries.
Relevant departments analyzed listed companies in the diaphragm industry. Statistical data shows that while some diaphragm companies still maintain relatively high gross profit margins, these margins have declined to varying degrees compared to previous years. In particular, with the further decline in average diaphragm prices and the increasing industry concentration, smaller companies in the industry have begun to incur losses. The era of high gross profit margins in the diaphragm industry is over; in the future, economies of scale are essential to reduce costs and improve profit margins. The diaphragm industry must rely on scale to succeed; as leading companies consolidate, opportunities for smaller companies will diminish.
Key technologies for lithium batteries need improvement.
The quality and level of the separator directly affect the quality of the battery, and it is a key technology that the separator industry urgently needs to solve. Currently, the separator market is experiencing overcapacity. By the end of 2015, the total effective output of domestic separators had reached 1.5 billion square meters, with an output of 700 million square meters in 2015. The domestic market demand in 2015 was approximately 900 million square meters.
It is estimated that by the end of 2016, my country's total output of battery separators may exceed 2.3 billion square meters, far exceeding the global demand for battery separators. However, the high-end power lithium-ion battery separator industry is still experiencing a supply shortage. Although the quality gap between high-end separator products and foreign products is narrowing, the gap remains significant, and import dependence is heavy. According to some data, 70% of high-end membranes are imported, and the import rate of separators exceeds 40%.
In recent years, the product quality and consistency of Chinese lithium battery material companies have improved rapidly, and domestic companies are gradually seizing market share from imported products. Furthermore, with the decline in upstream raw material prices, the cost of lithium-ion batteries has also decreased relatively quickly, leading Japanese and South Korean lithium battery companies to gradually increase their procurement of lithium battery materials from my country.
However, domestic lithium battery material companies still lag behind in the overall level of high-tech cathode and separator materials, making it difficult to penetrate key supply chains in the short term. Although domestic companies have a high global market share in anode and electrolyte materials, these are general-purpose products with less sensitivity to power lithium batteries, and they will face significant production and price pressures in the future.
my country has become the world's second-largest producer of lithium-ion batteries after Japan, with enormous market potential. Lithium-ion batteries are widely used in various industries, including automobiles and mobile phones. However, the safety and lifespan of Chinese lithium-ion batteries are still developing and some issues remain. The industry should prioritize safety, adopting advanced international production and monitoring standards to win over international markets with high-quality products. Currently, lithium-ion batteries urgently need improvement in safety, range, lifespan, cost, and ease of use.
