In recent years, the rapid growth of EV and energy storage markets has driven robust demand for lithium-ion batteries (LiBs). Data shows that in 2023, the total shipment of LiBs exceeded 1 terawatt-hour (TWh) for the first time, with the market size growing more than tenfold compared to 2015, and EV battery shipment accounted for over 70% of the general battery shipment.

As the electric vehicle and energy storage markets continue to grow, the demand for LiBs will enjoy further expansion, with global LiBs shipment expected to outstrip 3,200 GWh by 2027.

Despite the fact that LiB was initially commercialized in Japan in the 1990s and long dominated by Japanese and South Korean manufacturers, over two decades later, China has leapfrogged the two nations. Currently, over 75% of the world’s LiBs are produced in China, marking China’s top position in manufacturing LiB.

Likewise, in the EV battery sector, which accounts for the largest demand in the LiB market, six out of the top ten manufacturers globally are headquartered in China, including CATL, BYD, CALB, Gotion High-Tech, EVE Energy, and Sunwoda, which are expected to hold increasingly higher market shares while the market shares of Japanese and South Korean companies is declining year by year.

For instance, Panasonic’s market share in the EV battery market has dropped to around 6%, and the combined market share of South Korean manufacturers to approximately 23%.

However, with the advancement and breakthroughs in next-generation automotive battery technology—all-solid-state battery (ASSB) technology—the position of traditional liquid-state battery is being challenged.

• Next-Generation Battery Technology Comes to the Fore

On January 3, 2024, PowerCo, a battery subsidiary of Volkswagen, announced that its partner, QuantumScape, had successfully passed its first endurance test on solid-state batteries, achieving over 1,000 charge-discharge cycles while maintaining a capacity of over 95%.

Additionally, in September 2023, another solid-state battery listed company based in the US, Solid Power, announced that its first batch of A-1 solid-state battery samples had been officially delivered to BMW for automotive verification testing. BMW aims to launch its first prototype vehicle based on Solid Power’s solid-state battery technology by 2025.

Last year, Toyota has repeatedly stated its intention to commercialize solid-state battery technology by 2027-2028.

• Does All-Solid-State Battery (ASSB) Technology Truly has the Potential to Overturn Liquid-State Battery Technology?

Traditional liquid-state LiB is primarily composed of cathode and anode electrodes, separator, and electrolyte. The cathode and anode electrode materials play the role of storing lithium, which affects the battery’s energy density, while the electrolyte mainly influences the motion rate of lithium ion during charging and discharging processes, typically using liquid (Organic solvents) as the electrolyte.

However, during the charge-discharge process of traditional liquid-state LiB, side reactions can easily occur on the electrode surface. For example, lithium dendrites formed on the surface of the anode electrode can easily penetrate the separator, causing a short circuit between the cathode and anode electrodes and leading to battery fires.

In addition, the liquid electrolyte is a flammable substance, making liquid-state batteries prone to ignition and explosion under high temperatures or when the battery experiences external impacts that result in a short circuit. Therefore, liquid-state battery faces significant challenges in terms of safety.

Compared to liquid-state LiB, the electrolyte in ASSB is solid, which is less volatile or prone to combustion. Meanwhile, solid-state electrolytes are temperature-stable and less prone to decomposition, rendering them highly safe.

Furthermore, solid-state electrolytes exhibit better stability and mechanical properties, providing superior suppression of lithium dendrites and thereby enhancing battery safety.

On the other hand, traditional liquid-state LiB is limited in their choice of materials due to their narrow electrochemical window and side reactions between the liquid electrolyte and the cathode and anode electrode materials. Solid-state electrolytes, however, offer a wider electrochemical window and fewer side reactions, allowing for a broader range of electrode materials to be used in solid-state battery.

This enables the use of higher energy density active materials. For instance, solid-state battery based on lithium metal anodes can achieve energy densities of over 500 Wh/kg, while liquid-state LiBs can hardly reach this level, with a theoretical energy density limit of 350 Wh/kg. Currently, traditional liquid-state LiBs have approached their theoretical energy density limit, and there’s little room for further improvement.

On top of that, ASSB also boasts better temperature adaptability (-30 to 100°C) and high power characteristic, which can help improve the operating temperature range and fast-charging performance of EV battery.

Meanwhile, as there is no need for liquid electrolytes and separators, the weight of ASSB cells can be reduced. Additionally, processes such as electrolyte filling, degassing, molding, and aging can be removed during the cell assembly process, simplifying the cell manufacturing process. As a whole, given its outstanding performance, ASSB indeed holds the potential to revolutionize liquid-state LiB.

Currently, ASSB, in face of a series of technical challenges, has not yet achieved large-scale production. These challenges include the batch preparation of electrolyte materials, interface stability/side effects between solid materials, as well as the breakthrough of technical hurdles in cell preparation processes, production equipment, and other aspects.

Still, with significant attention and investment from countries worldwide, including Japan, South Korea, Europe, and the US, ASSB has made important progresses and is expected to achieve mass production within 3-5 years.

• Will China be Overtaken in the Market Competition of All-Solid-State Battery?

Currently, ASSB has emerged as the high ground in the competition for next-generation battery technology. The development of ASSB has been listed as a national development strategy by major countries and regions such as Japan, South Korea, the US, and the European Union, and global enterprises are actively making inroads in this field.

Based on different solid electrolyte technical routes, ASSB can be divided into four types: polymer, oxide, halide, and sulfide solid-state batteries. Each of these technology routes has its own advantages and disadvantages. Currently, Japan and South Korea mainly select sulfide as the primary technical route.

In light of the development progress of ASSB in major regions globally, Japan is an early starter in R&D, which takes a lead in the application of patents, and accumulates the most solid-state battery patented technologies worldwide. Japanese companies like Toyota and Nissan have stated their intention to achieve mass production of ASSB around 2028.

In South Korea, major battery manufacturers like Samsung SDI, SK Innovation, and LG Energy Solutions continue to invest in R&D. Samsung SDI completed the construction of a pilot production line (S-line) for ASSBs in 2023 and plans to achieve mass production in 2027.

In the United States, solid-state battery development is primarily led by startups with high innovation potential. Companies like QuantumScape and Solid Power have solid-state battery products in the A-sample stage, while SES’ lithium-metal solid-state batteries have entered the B-sample stage. Other US companies such as Ampcera, Factorial Energy, 24M Technologies, and Ionic Materials have channeled more efforts in solid-state battery technical innovation.

Overall, the period around 2028 is expected to be tipping point for the mass production of ASSB.

Although China is currently the world’s largest manufacturer of LiB, there is still a significant gap between Chinese companies and international ones in terms of patent layout for ASSB.

Additionally, China’s solid-state battery technical routes are diverse, with a focus mainly on semi-solid/state-liquid hybrids, with semi-solid-state battery achieving small-scale production and adoption in vehicles, but investment in ASSB remains insufficient in China, and resources are dispersed. This has led to a significant difference compared to international forerunners.

Therefore, in the future competition for ASSB, companies from Japan, South Korea, Europe, and the US have the opportunity to surpass China and reshape the competitive landscape of future EV battery industry.

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(Photo credit: Pixabay)

Kyle Corbitt, co-founder and CEO of AI startup OpenPipe, revealed in a post on social platform X that he recently spoke with a Microsoft engineer responsible for the GPT-6 training cluster project. The engineer complained that deploying InfiniBand-level links between GPUs across regions has been a painful task.

Continuing the conversation, Corbitt asked, “why not just colocate the cluster in one region?” The Microsoft engineer replied, “Oh yeah, we tried that first. We can’t put more than 100K H100s in a single state without bringing down the power grid.”

At the just-concluded CERAWeek 2024, attended by top executives from the global energy industry, discussions revolved around the advancement of AI technology in the sector and the significant demand for energy driven by AI.

As per a report from Bloomberg, during his speech, Toby Rice, chief of the largest US natural gas driller, EQT Corp., cited a forecast predicting AI could gobble up more power than households by 2030.

Additionally, Sam Altman from OpenAI has expressed concerns about the energy, particularly electricity, demands of AI. Per a report from Reuters, at the Davos Forum earlier this year, he stated that AI’s development requires breakthroughs in energy, as AI is expected to bring about significantly higher electricity demands than anticipated.

According to a report by The New Yorker on March 9th citing data of Alex de Vries, a data expert at the Dutch National Bank, it has indicated that ChatGPT consumes over 500,000 kilowatt-hours of electricity daily to process around 200 million user requests, equivalent to over 17,000 times the daily electricity consumption of an average American household. As for search giant Google, if it were to use AIGC for every user search, its annual electricity consumption would increase to around 29 billion kilowatt-hours, surpassing the annual electricity consumption of countries like Kenya and Guatemala.

Looking back at 2022, when AI hadn’t yet sparked such widespread enthusiasm, data centers in China and the United States respectively accounted for 3% and 4% of their respective total societal electricity consumption.

As global computing power gradually increases, a March 24th research report from Huatai Securities predicts that by 2030, the total electricity consumption of data centers in China and the United States will reach approximately 0.95/0.65 trillion kilowatt-hours and 1.7/1.2 trillion kilowatt-hours respectively, representing over 3.5 times and 6 times that of 2022. In an optimistic scenario, by 2030, the AI electricity consumption in China/US will account for 20%/31% of the total societal electricity consumption in 2022.

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(Photo credit: Taiwan Business Topics)

The BG-RRP-4.032 tender will support new solar and/or wind power projects with co-located energy storage facilities. A budget of BGN 107.57 million (roughly USD 60 million) has been allocated to aid the construction of at least 200 MW wind and solar capacity along with 100 MW of storage. Projects can have an installed capacity of 200 kW to 2 MW.

The maximum grant available for a single project will cover up to 50% of the eligible costs but it cannot exceed BGN 1.08 million (roughly USD 0.60 million) for 1 MW of installed energy storage capacity.

The other procurement call BG-RRP-4.033 will also support new solar and/or wind energy projects with co-located storage facilities with an installed capacity of more than 200 kW. The total budget for this round is BGN 427.5 million (roughly USD 238 million) to aid the development of a minimum 940 MW renewable energy and 200 MW storage capacity.

Eligible applicants for both these tenders can come from all sectors of the economy, barring those from agriculture, forestry and fisheries.

The tenders have been issued under the country’s National Recovery and Resilience Plan through which it targets to install 1.425 GW new renewable energy and 350 MW energy storage capacity to the national grid.

Launched on March 14, 2024, the last date for bid submission for these tenders is June 12, 2024.

The launch of these tenders follows a consultation round opened by the ministry in October 2023 for 520 MW wind and solar energy along with 150 MW storage capacity.

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• [News] Bulgarian SUNOTEC Signed a Contract with Huawei to Promote the Application of Battery Energy Storage Technology in Europe

(Photo credit: Taiwan Business TOPICS)

Huawei has accumulation of digital technology, power electronics and energy storage technologies, and SUNOTEC have comprehensive advantages in the development and construction, quality control, and project management of PV and energy storage stations. The two enterprises will carry out comprehensive cooperation in the development and application of battery energy storage technology innovation, construction and operation of large-scale energy storage power stations in Europe.

Kaloyan Velichkov, the founder and CEO of SUNOTEC, said: “We are delighted to sign this MOU with Huawei, which signifies our joint efforts to further advance our green energy initiatives. The two companies will pave the way for a zero-carbon future, promote technological innovation and promote environmental stewardship, in line with SUNOTEC’s Vision 2030. ”

Huang Hongqi, the director of Huawei’s Digital Power Global Sales Dept, said, “SUNOTEC is an important partner for us. The signing of this MOU will deepen our cooperation in the field of renewable energy, especially the large-scale application of battery energy storage systems in Europe.

Last year, we signed a cooperation agreement for a 500MW PV project with a good result. This is a milestone in the commitment of both parties to accelerate the transformation and upgrading of the energy industry and promote sustainable development for a green and beautiful future. ”

Huawei currently provides intelligent PV and energy storage projects solutions and comprehensive technical support for SUNOTEC’s PV and energy storage projects in Europe. The two parties will leverage their respective advantages to jointly contribute to Bulgaria’s green and low-carbon transformation and sustainable development.

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(Photo credit: Huawei)

Polysilicon

Polysilicon prices have diverged throughout the week. The mainstream concluded price for mono recharge polysilicon is RMB 57/KG, while mono dense polysilicon is priced at RMB 55/KG and N-type polysilicon is currently priced at RMB 64/KG.

The top-tier polysilicon companies are in a positive transaction phase, having essentially wrapped up January 2024 orders. Some businesses are still in the negotiation phase.

Regarding order prices, N-type polysilicon has maintained stability, primarily fueled by increased N-type wafer output and heightened demand resulting from a shift in part of the P-type wafer production capacity to N-type wafers.

Conversely, P-type polysilicon prices have experienced fluctuations and a continued decline. On one hand, the newly added production capacity has yielded low-quality polysilicon, exacerbating the oversupply issue for P-type polysilicon.

On the other hand, diminishing downstream output of P-type wafers has impacted the demand for P-type polysilicon, contributing to its declining price. Looking at the supply side, the influx of new production capacity in January is steadily increasing polysilicon output, with a medium single-digit month-on-month growth rate.

On the demand side, crystal pulling manufacturers maintain a high activation rate, but the output of N-type crystal pulling is rapidly rising.

In summary, this month shows positive supply and demand dynamics for N-type polysilicon, providing robust support for its price. However, the outlook for P-type polysilicon is bleak due to the production of low-quality output from the newly added capacity, creating an imbalance in the demand and supply relationship.

The expectation is that the price gap between N-type and P-type polysilicon will widen. This week, the prices of rechargeable and dense polysilicon have further declined, while N-type polysilicon remains stable.

Wafer

The prices of wafer have diverged throughout the week. The mainstream concluded price for M10 P-type wafer is RMB 1.90/Pc, while G12 P-type wafer is priced at RMB 3.00/Pc and M10 N-type is priced at RMB2.25/Pc.

Regarding P-type wafers, the pricing for 182mm and 210mm P-type wafers stands at 1.9 yuan and 3.0 yuan per piece, respectively, closely aligned with their cost structures. On the supply side, the swift shift of wafer manufacturers towards the production of N-type wafers has significantly diminished the output proportion of P-type wafers.

Concurrently, the shutdown of production capacities for downstream P-type cells on the demand side indicates a gloomy market for P-type products. Additionally, the stagnant price is attributed to low trading volumes, and P-type wafers have evolved into customized products, with their price trends and trading volumes contingent on the delivery of P-type projects.

Turning to N-type wafers, the supply side witnesses a double-digit increase in the output proportion of N-type wafers, projected to reach 70%. On the demand side, cell manufacturers are predominantly shifting towards N-type products, providing robust support for the demand for N-type wafers.

However, it is crucial to note the potential risk of increasing inventory for N-type wafers due to oversupply. There remains a possibility that the supply of N-type wafers will exceed demand, leading to fluctuations and a gradual decline in N-type wafer prices.

Moreover, concerning wafer sizes, rectangle wafers will dominate the N-type wafer market, and as the trading volume of various rectangle wafer sizes increases, we can expect more quoted prices for different sizes of N-type rectangle wafers. This week, the price of P-type wafers has remained unchanged, while the price of N-type modules has dropped to 2.1 yuan per piece.

Cell

Cell prices have remained stable this week. The mainstream concluded price for M10 cell is RMB 0.37/W, while G12 cell is priced at RMB 0.38/W. The price of M10 mono TOPCon cell is RMB 0.46/W.

Concerning P-type cells, the pricing for 182mm and 210mm P-type cells is set at 0.37 yuan and 0.38 yuan per watt, respectively. Notably, P-type cell prices have dipped below the cost line, leading to the essentially complete shutdown of its production capacity. Once cell manufacturers complete the delivery of ongoing projects, the production capacity for P-type cells will be cleared out.

On the supply side, major cell manufacturers have extensively halted P-type production capacities, resulting in a sharp decline in P-type cell output. Additionally, the demand from module manufacturers for P-type cells is rapidly diminishing.

With a decrease in both supply and demand, P-type cell prices are currently at a standstill. Specialized manufacturers are taking the strategic approach of halting production and stockpiling inventory to maximize profits when delivering the remaining P-type products.

On the flip side, regarding N-type cells, the supply side sees a higher share of total cell output. However, on the cost front, the positive support from the prices of N-type polysilicon and wafers is aiding in stabilizing N-type cell prices.

On the demand side, there is a significant increase in customer demand. Consequently, N-type cell prices have remained stable this week, supported by a balanced combination of supply, demand, and cost factors.

Module

Module prices have remained stable throughout the week. The mainstream concluded price for 182mm facial mono PERC module is RMB 0.98/W, 210mm facial mono PERC module is priced at RMB 1.00/W, 182mm bifacial glass PERC module at RMB 1.00/W, and 210mm bifacial glass PERC module at RMB 1.01/W.

On the demand side, module manufacturers are experiencing a decline in the month-on-month growth rate of modules in January. With the conclusion of the last quarter’s earnings and the approach of the holiday season, both domestic and overseas demand have slowed down.

Module manufacturers are displaying a reduced inclination to boost output, opting to cut production to varying extents. The anticipated order amounts for January are relatively pessimistic on the demand side. Even top-tier manufacturers with existing orders supporting their production are witnessing a decreasing trend in order volume, let alone other manufacturers with fewer orders who find themselves compelled to cut or halt production.

Regarding domestic demand, January marks the off-season, and the purchasing demand for ground-based and distributed solar projects is at its lowest point for the entire year. However, overseas markets are showing signs of recovery, with a positive turn in month-on-month export volumes.

Furthermore, the continuous decline in module prices has spurred demand in the Indian market, while Brazil and Saudi Arabia experience a boom due to supportive government policies. Nevertheless, the export to the European market has not yet turned positive, and it will take time to deplete existing inventory and witness a recovery in demand. This week, both P-type and N-type module prices have remained stable.

TrendForce’s insight:

1. Alternative Solution Cannot be Translated into Immediate Success

While countries like Japan and South Korea have swiftly initiated strategies to find alternative solutions, the majority are still in the evaluation, research, or testing stages, unable to provide immediate assistance.

Even if alternative graphite production sources outside of China, such as in North America or Australia, are identified, it is likely to increase manufacturing costs, thereby impacting the selling price or profit performance of electric vehicles.

2. Back to Negotiation with Chinese Manufacturers

The post-export control scenario may accentuate the cost advantage of Chinese battery manufacturers, influencing the effectiveness of various protective measures taken by Europe and the United States to counter Chinese electric vehicles.

Consequently, countries may ultimately realize that returning to the negotiation table with China is more practical than going through a prolonged process, aligning with China’s primary objective.

3. Material Edge Won’t Last Forever

The continuous export restrictions on critical materials by China may encourage countries to persist in developing alternative solutions. For instance, OEMs like Tesla, GM, and Stellantis are actively investing in research on rare-earth-free motors to reduce dependency on Chinese rare earths.

While currently constrained by battery material technology, graphite remains the highest-value anode material. Yet, numerous companies are also exploring anodes with higher energy density, such as silicon oxide (SiO) and lithium metal (Li Metal).

Therefore, China must recognize that material advantages may not be permanent, and the core lies in the ability for technological iteration.

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(Photo credit: Pixabay)

• Polysilicon

Polysilicon prices continue to decline throughout the week. The mainstream concluded price for mono recharge polysilicon is RMB 64/KG, while mono dense polysilicon is priced at RMB 62/KG and N-type polysilicon is currently priced at RMB 66/KG.

Looking at the market transaction dynamics, there’s not a significant volume of orders being placed. Some companies are gearing up for December’s order negotiations. Observing the price trend, polysilicon manufacturers are adjusting prices for both new and existing orders. Even some previously high-priced orders have experienced declines.

Furthermore, the average price of N-type polysilicon in new orders is generally below the 70000 yuan/ton mark. On the supply side, numerous projects are now in production, leading to a constant increase in the marginal increment of polysilicon and further swelling polysilicon inventory. Consequently, polysilicon manufacturers are grappling with increased pressure to de-stock.

Despite a month-on-month rise in operation rates for professional wafer manufacturers, creating additional demand for polysilicon, the surplus supply remains challenging to address.

This week, polysilicon prices continue their downward trajectory, and there’s a significant oversupply of polysilicon. Moreover, with customer installation demand still not turning positive, crystal pulling manufacturers are adopting a pessimistic stance toward future polysilicon prices, displaying a cautious approach to purchasing polysilicon.

On the flip side, polysilicon manufacturers are determined to maintain current prices and show no signs of reducing prices to clear inventory. In conclusion, a tug-of-war in pricing dynamics is evident between buyers and sellers.

• Wafer

The prices of wafer have maintained stable throughout the week. The mainstream concluded price for M10 P-type wafer is RMB 2.30/Pc, while G12 P-type wafer is priced at RMB 3.30/Pc and M10 N-type is priced at RMB2.40/Pc.

On the supply side, wafer inventory has returned to the reasonable range, sitting at approximately 1.3-1.5 billion pieces. Analyzing various wafer types, the inventory of 210mm P-type wafers has seen a notable decrease, with the consumption rate slowing due to weakened demand.

With the alleviation of inventory pressure, specialized wafer manufacturers are ramping up their operational rates, resulting in a slight month-on-month increase in wafer output. Turning to the demand side, cell manufacturers are indicating a reduction in the production of 182mm P-type cells, while there’s no change in output for other cell types.

Consequently, the purchasing demand for 182mm P-type wafers is expected to decrease. Although wafer prices are holding steady this week, considering the divergent operational rates among downstream cell manufacturers, a future divergence in prices between N-type and P-type wafers is anticipated.

Moreover, attention should be directed towards whether the demand and supply relationship can sustain stable prices after the higher wafer activation rates lead to an increase in wafer output during the same period.

• Cell

Cell prices have maintained stable this week. The mainstream concluded price for M10 cell is RMB 0.46/W, while G12 cell is priced at RMB 0.56/W. The price of M10 mono TOPCon cell is RMB 0.49/W.

On the supply side, cell inventory can currently sustain for about six to seven days, but the pressure on inventory is mounting as downstream demand gradually declines. We’re currently in the midst of the technology iteration phase for N-type and P-type cells.

The production capacity of 182mm P-type cells has significantly dropped, leading to a decline in its OEM fees to 1.0-1.2 yuan. Given the current cell price and the manufacturing cost, the production line for 182mm P-type cells is operating at a loss, while the 210mm P-type cells are still profitable, thanks to orders this month.

However, as order deliveries conclude, the tense supply and demand dynamics are expected to ease. On the demand side, downstream module prices continue to slide, prompting module manufacturers to push for a reduction in cell prices. Additionally, customer demand is sluggish, and buyers are adopting a more cautious approach to future purchases.

This week, cell prices remain relatively stable, but production of 182mm P-type cells has been significantly reduced due to sustained losses, leading to a simultaneous decline in demand and supply. Nevertheless, there is still support from order deliveries for 210mm P-type cells.

In conclusion, with module prices consistently decreasing, we anticipate that cell prices will face increasing pressure in the coming weeks.

• Module

Module prices have gone down throughout the week. The mainstream concluded price for 182mm facial mono PERC module is RMB 1.03/W, 210mm facial mono PERC module is priced at RMB 1.04/W, 182mm bifacial glass PERC module at RMB 1.04/W, and 210mm bifacial glass PERC module at RMB 1.05/W.

On the supply side, prices quoted by leading manufacturers to their dealers have plummeted to less than 1 yuan/W, and bidding prices for recent projects are hitting unprecedented lows. The competition among module manufacturers has reached a fever pitch, driving prices in the sector to their rock bottom.

As the N-type and P-type technology undergo iteration, production capacity is slated to be officially cleared at its current low price. Shifting to the demand side, October saw a month-on-month decrease in new PV installations, indicating a clear decline in installation demand, according to statistics from the NEA.

Although distributed PV installed capacity remains robust, it cannot sustain a significant increase, and centralized ground installations are entering their off-season. Additionally, there’s no indication of a rebound in overseas demand, making it challenging for customer demand for module purchases to turn positive.

As the year draws to a close and earinings reports will be reported, manufacturers are grappling with the pressure to meet annual goals, intensifying the need to clear inventory. However, they find themselves in a precarious position in negotiations with customers, compelling them to further reduce prices to facilitate more shipments.

In summary, module prices are experiencing a decline this week and are anticipated to further decrease in the near future.

On October 20th, China announced that certain graphite items, including high-purity, high-strength, and high-density synthetic graphite materials and their products, cannot be exported without permission.

This regulation officially takes effect on December 1st of this year. Graphite is crucial for manufacturing the negative electrode of lithium-ion batteries for electric vehicles. While the permit requirements do not constitute a ban, they may lead to a reduction in China’s graphite exports.

Over 80% of the natural graphite used in Japan comes from China. In case of a disruption in graphite imports, Mitsubishi Chemical Group in Japan is considering strengthening its production of electrode materials in Shandong. The company is also exploring partnerships in Australia and production in Mozambique and Norway to diversify the supply.

Representatives from Nissan Motor Company have stated that they will consider sourcing graphite and other key electric vehicle materials from alternative regions.

Panasonic’s battery subsidiary, Panasonic Energy, is collaborating with a Canadian graphite company on research for large-scale production of electrode materials. In September of this year, the Japanese Ministry of Economy, Trade, and Industry (METI) and the Canadian government signed an agreement to strengthen the battery supply chain.

According to data from the United States Geological Survey, the global graphite production reached 1.3 million tons in 2022, experiencing a 15% year-on-year growth due to the popularity of electric vehicles. China contributes to 70% of the graphite production and is a major producer of synthetic graphite. China serves as the primary low-cost exporter for both types of materials.

“The costs of procuring graphite will inevitably rise, the focus will be on how companies maintain their competitive advantage while bearing the costs.” as stated by Noboru Sato, visiting professor at Nagoya University.

Graphite is not the sole crucial mineral for China. In August of this year, China intensified export restrictions on gallium and germanium, vital rare metals used in the manufacturing of electronic components and semiconductors. Customs data indicates a significant decrease in the export of these two metals.

Japanese manufacturers are also exploring materials sources unaffected by China’s export controls. Kanto Denka Kogyo, a chemical producer, is testing lithium compounds from regions like South America to manufacture battery electrolytes. The company is also collaborating with Sumitomo Metal Mining to test technology for lithium recovery from discarded electric vehicle batteries.

At the same time, Japan is using diplomacy and foreign aid to ensure a stable supply of critical materials. Both China and Japan have confirmed the establishment of new bilateral export control dialogues. Senior trade officials from both sides will engage in regular consultations on export restriction issues.

The Japanese Ministry of Economy, Trade, and Industry is seeking JPY 260 billion (approximately USD 1.74 billion) in the supplementary budget proposal for this fiscal year to support Japan’s battery manufacturing. Some of the funds may be allocated for investing in companies producing synthetic graphite in Japan.

Last year, Japan’s additional budget provided approximately JPY 200 billion to support the extraction, refining, and processing of critical minerals. Companies investing overseas in the production of rare metals will receive subsidies of up to half.

Companies outside Japan are also taking action to mitigate the impact of Chinese supply restrictions. According to Business Korea’s report, South Korea’s company Posco Future M, which produces battery materials, has preemptively planned to manufacture synthetic graphite using coal tar, a byproduct that can be sourced domestically in Korea.

Read more

• [News] China Implements Export Restrictions on Graphite, Impacting Battery and Electric Vehicle Industries
• [News] China’s Export Control Measures and Their Impact on Electric Vehicle Battery Production

(Photo credit: Pixabay)

• Polysilicon

Polysilicon prices continue to decline throughout the week. The mainstream concluded price for mono recharge polysilicon is RMB 65/KG, while mono dense polysilicon is priced at RMB 63/KG, and N-type polysilicon is currently priced at RMB 68/KG.

Looking at the market transaction dynamics, orders took a hit this week, and collectively signing orders within a centralized period has ceased. Observing the price trends, major manufacturers are experiencing a decline in new orders, causing a further narrowing of the transaction prices for both N-type and P-type polysilicon.

Looking at the supply side, the new production capacity of leading polysilicon manufacturers is set to come online this month, contributing to an uptick in output. Consequently, the polysilicon supply will continue to outpace demand, leading to a further increase in polysilicon inventory, which has now reached the range of 90,000 to 120,000 tons this week. Shifting the focus to the downstream industrial chain, the wafer inventory has reverted to a reasonable level, and there’s a slight uptick in the activation rate of crystal-pulling manufacturers.

This has resulted in an increased demand for polysilicon. However, this heightened demand is insufficient to counterbalance the marginal increase in polysilicon supply. In summary, the price of polysilicon is on a downward trajectory, and with new production capacities slated to come online by year-end, the short-term supply-demand imbalance is unlikely to be rectified.

Compounding this, the absence of concrete demand from customers indicates an anticipated further dip in polysilicon prices. The inventory of N-type polysilicon is expanding, intensifying pressure on upstream raw materials. Consequently, the support for N-type polysilicon prices is diminishing, and the price gap between N-type and P-type polysilicon is expected to shrink.

• Wafer

The prices of wafers have remained stable throughout the week. The mainstream concluded price for the M10 P-type wafer is RMB 2.30/Pc, while the G12 P-type wafer is priced at RMB 3.30/Pc and the M10 N-type is priced at RMB2.40/Pc.

On the supply side, there are indications that specialized polysilicon manufacturers may ramp up their operating rates, primarily due to a reduction in wafer inventory. The current inventory of wafers has dwindled to the range of 1.4-1.6 billion pieces, bringing substantial relief to wafer manufacturers from inventory pressures. Switching to the demand side, the pressure on cell demand persists, with cell inventory remaining unconsumed.

Consequently, some cell manufacturers are contemplating production cuts to mitigate potential future losses. This slowdown in demand from cell manufacturers is causing a sluggishness in the demand for wafers. Currently, both wafer and cell prices are hovering close to their production costs, empowering manufacturers on both fronts to engage in assertive bargaining. As a result, it is anticipated that price negotiations will reach a stalemate in the short term.

In summary, wafer prices have held steady this week, but it’s crucial to remain vigilant as wafer prices might face renewed pressure. This could be triggered by a decline in upstream raw material prices and the persistent lack of positive momentum in downstream demand.

• Cell

Cell prices have been different with the G12 cell price rebounding and other types remaining stable this week. The mainstream concluded price for the M10 cell is RMB 0.46/W, while the G12 cell is priced at RMB 0.56/W. The price of the M10 mono TOPCon cell is RMB 0.49/W.

On the supply side, the overall cell inventory is proving challenging to deplete due to the persistently sluggish downstream demand. This situation is exerting increased pressure on cell inventory levels. Additionally, faced with the challenge of low cell prices, a portion of the high-cost P-type cell production capacity has been gradually scaled back. If prices continue to decline in the future, this segment of production capacity may eventually phase out.

This underscores the evolving landscape of P-type and N-type cell technologies, prompting cell manufacturers to reassess how they manage the older production capacity of P-type cells. Shifting to the demand side, module inventory remains elevated, yet overseas customer demand remains weak even during the peak season. In summary, cell prices have remained stable this week. With the support from the delivery of orders this month, there is intense demand for 210mm P-type cells, leading to a rebound in their prices.

• Module

Module prices have gone down slightly throughout the week. The mainstream concluded price for 182mm facial mono PERC module is RMB 1.06/W, 210mm facial mono PERC module is priced at RMB 1.08/W, 182mm bifacial glass PERC module at RMB 1.07/W, and 210mm bifacial glass PERC module at RMB 1.09/W.

On the supply side, there’s a divergence in production schedules among module manufacturers. First-tier manufacturers are maintaining stable delivery schedules with sufficient orders, while second and third-tier manufacturers are compelled to scale back production to avert losses. Additionally, it’s crucial to monitor the impact of backhaul orders’ sale prices on domestic module prices. Turning to the demand side, overseas module inventory remains elevated, coupled with sluggish purchasing demand.

The customer demand for modules is heading into the off-season. Furthermore, the demand for distributed PV installations is struggling to turn positive due to overall weak demand. Faced with weak downstream demand, module manufacturers are adopting a strategy of lowering prices to facilitate more shipments, driven by the imperative to clear inventory by year-end. In summary, module prices are anticipated to experience a slight decline this week.

Read more:

• PV Industry Supply Chain Price Update
• PV Materials Price in Early November

TrendForce’s Insights:

1. Prioritizing energy efficiency and conservation in data centers

Modern enterprises heavily rely on data centers, but the associated energy costs are substantial. The market is expected to grow by over 25% from 2023 to 2030. Current strategies for improving energy efficiency encompass (1) reducing the energy consumption of IT equipment, (2) minimizing losses in distribution devices and uninterruptible power supplies, (3) implementing airflow management to optimize cooling, and (4) optimizing cooling and humidification systems through Heating, Ventilation, and Air Conditioning (HVAC).

2. Global shift to net-zero carbon emissions and the rise of low-carbon Green DCs

The construction of Green DCs with lower carbon is becoming a pivotal approach for major players, especially in the design of IT infrastructure for server rooms. This includes components such as network routers, switches, storage systems, firewalls, server racks, and redundant power supplies, all of which are subject to energy-saving requirements.

Key practices involve adopting liquid cooling and energy-efficient core IT equipment to achieve improved energy efficiency. Certification standards, such as Green Mark DC Platinum Certification, play a crucial role. The TIA-942 standard, by TIA and ANSI, distinguishing data centers into Tiers I through IV, often requires compliance with certifications like ISO 20000 and ISO 27001. Additionally, the international standard ISO/IEC 22237 lays the groundwork for globally planning, constructing, and operating data centers based on shared principles in the future.
(Image: TIA)