In recent years, with the rapid development of electric vehicles in China, the average annual growth rate of the downstream lithium battery industry has exceeded 20%. Regardless of quantity or quality, lithium battery products have put forward new requirements for upstream raw materials. Polyvinylidene fluoride (PVDF) is an indispensable binder in lithium battery cathode materials. Before the accelerated development of the electric vehicle industry, fluorine-containing coatings have always been the largest application market for PVDF, mainly used for anti-corrosion of building steel structures. By 2020, the consumption of PVDF in the field of lithium batteries has exceeded that of coatings, about 14,000 tons, and the consumption accounted for 36%.
The rapid development of the downstream lithium battery industry drives the rapid growth of PVDF consumption
Electric vehicles are the most important application area of lithium batteries. Energy storage batteries, as another application area of lithium batteries with a relatively small consumption, will also experience rapid growth in the next five years. Among all chemical energy storage applications, the cost advantage of lithium battery energy storage is particularly obvious. Among the new chemical energy storage batteries in the past five years, 99% are lithium battery energy storage. It is estimated that by 2025, the installed capacity of new energy storage will reach more than 30GW, and the average annual growth rate will exceed 50% from 2021 to 2025. CATL, BYD, and other Chinese lithium battery companies have been deploying energy storage batteries in the past two years and increasing R&D investment.
PVDF suppliers have expanded production
Driven by the strong demand of the downstream lithium battery industry, upstream PVDF manufacturers plan to expand their PVDF production capacity. There are currently about 10 PVDF manufacturers in China, and more than half of them have plans to build new PVDF production capacity in the next few years. Of course, these new production capacities are all aimed at the lithium battery market.
It is estimated that in the next five years, China’s new PVDF capacity will reach 66,500 tons/year, of which 17,000 tons/year will be the planned capacity of foreign companies [Arkema, Kureha, Solvay…], and the rest will be The planned production capacity of local Chinese companies. Driven by strong downstream demand, these planned production capacities are expected to be put into production successively in the next five years. However, due to the long approval and construction cycle for new PVDF capacity, and the increase in upstream R142b raw material quotas and capacity increases also require a longer approval time, it is expected that the growth rate of upstream PVDF supply will still be slower than the growth rate of downstream demand in the short term. After two years, the situation of short supply will gradually improve.