Mianyang Fulin Precision Co.Ltd(300432) cooperates with Yichun, a place rich in lithium mica, to build a 200000 ton lithium iron phosphate project

In order to ensure the supply of lithium resources, Mianyang Fulin Precision Co.Ltd(300432) will set up the lithium iron phosphate production project in Yichun. On February 28, Mianyang Fulin Precision Co.Ltd(300432) ( Mianyang Fulin Precision Co.Ltd(300432) ) announced that Jiangxi Shenghua, a subsidiary, had reached a cooperation framework agreement with the Management Committee of Yichun Economic Development Zone, covering the investment of new energy lithium battery cathode material industry project, the development and utilization of lithium resources and the guarantee and support of lithium resources, the core raw material corresponding to the industrial project.

According to the agreement, Jiangxi sublimation invested 200000 tons of new high-voltage solid lithium iron phosphate cathode material and supporting main materials integration project, R & D center and science and technology platform in Yichun economic development zone; Promote the comprehensive development and utilization of lithium resources, including but not limited to lithium mine development projects, lithium salt production capacity construction projects, lithium battery recycling projects, etc; Yichun economic development zone gives Jiangxi sublimation sufficient guarantee and support based on the guarantee and supply of lithium resources, the core material of the project.

Specifically, the total investment of lithium iron phosphate production project is expected to be about 5 billion yuan, which will be invested in two phases, with 2.5 billion yuan each, to build a new high-voltage solid lithium iron phosphate cathode material and supporting main material project with an annual capacity of 100000 tons.

In July 2021, Mianyang Fulin Precision Co.Ltd(300432) once announced that Jiangxi Shenghua plans to invest in the construction of lithium iron phosphate cathode material project with an annual output of 250000 tons, with an estimated total investment of 4 billion yuan. At the same time, Jiangxi sublimation reached an agreement with lvran technology and the Management Committee of Sichuan Shehong Economic Development Zone to locate the 60000 tons of the first phase of the above project in Shehong western international technical cooperation Industrial Park. In mid January this year, the company said on the interactive platform that the Shehong base project has been officially put into operation, the production capacity has been released in an orderly manner, and Contemporary Amperex Technology Co.Limited(300750) and other major customers are being supplied in batches.

At present, the production of lithium iron phosphate is mainly restricted by lithium resources. The price of raw material lithium carbonate has soared from the lowest 40000 yuan / ton last year to the highest 470000 yuan / ton recently. Yichun, Jiangxi Province, which Mianyang Fulin Precision Co.Ltd(300432) chose to cooperate this time, is a rich place of lithium mica in China. Minmetals securities expects the output of lithium mica in Jiangxi to reach 54000 tons of LCE in 2021, and the total output of its own mines is expected to increase rapidly in the next few years. In addition, Yichun has successively introduced Contemporary Amperex Technology Co.Limited(300750) , Gotion High-Tech Co.Ltd(002074) and other lithium battery industry chain star enterprises in recent years, with obvious industrial agglomeration effect.

Jiangxi Shenghua, the main body undertaking the expansion project, has just obtained Contemporary Amperex Technology Co.Limited(300750) capital increase Mianyang Fulin Precision Co.Ltd(300432) announced on February 16 that Contemporary Amperex Technology Co.Limited(300750) plans to further increase the capital of Jiangxi sublimation and subscribe for the registered capital of 144 million yuan. After the capital increase, the shareholding ratio will rise to 20% and the registered capital of Jiangxi sublimation will increase to 820 million yuan.

Lithium iron phosphate has been sought after by the market in the past year due to its cost-effective advantages. According to the data of China automotive power battery industry innovation alliance, the cumulative loading volume of China Shipbuilding Industry Group Power Co.Ltd(600482) batteries in 2021 was 154.5gwh, including 79.8gwh of lithium iron phosphate batteries, accounting for 51.7%, with a year-on-year growth rate of 227.4%, four times that of ternary batteries. In January this year, lithium iron phosphate battery continued its rapid momentum, realizing 8.9gwh loading volume, with a year-on-year increase of 172.7%.

It should be noted that the lithium iron phosphate track has attracted many players to participate in the competition, and there is a potential risk of overcapacity in the industry. According to the reporter of securities times · e company, the scale of production expansion claimed by various manufacturers and the existing production capacity have reached 5 million tons, significantly exceeding the downstream demand in 2025. According to the normal production expansion cycle, the surplus will appear next year, but limited to energy consumption indicators, lithium resource shortage and other factors, this time point may be postponed.

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