market share of graphitization processing companies will be less than 30%

It is expected that the price of anode materials will further drop in 2024, and the market share of graphitization processing companies will be less than 30%

Currently, there are more than 90 anode production companies, the industry's production capacity is approaching 4 million tons, and the average capacity utilization rate of the entire industry is less than 50%. Most companies are faced with the problem of stopping production immediately after starting production, and it is difficult to absorb production capacity. It is expected that in 2024, negative electrode small and medium-sized enterprises will face: the price of negative electrode materials will further drop, and the mainstream artificial graphite 340mAh/g product will be less than 16,000 yuan/ton; it will be difficult to start discontinued projects and the operating costs will be high; a small number of customer orders will be sold out by the market "Segmentation"; the payment collection cycle of upstream anode suppliers is lengthened, and the risk of payment collection increases. Despite structural overcapacity and the industry entering a reshuffle period, the anode material market still has room for growth. It is estimated that my country's anode material shipments are expected to reach 5.8 million tons in 2030, of which artificial graphite is still the mainstream in the market, with shipments exceeding 4.7 million tons.

The current CR6 concentration rate in the anode materials industry is 78%. There are less than 15 anode companies that ship more than 1,000 tons of anodes per month, occupying more than 80% of the market share of the entire industry, while the remaining more than 80 companies will "grab" the remaining 20% of the market.

According to incomplete statistics from GGII, there are currently more than 90 anode production companies, the industry's production capacity is approaching 4 million tons, and the average capacity utilization rate of the entire industry is less than 50%. Most companies are faced with the problem of stopping production immediately after starting production, and it is difficult to absorb production capacity. From the perspective of production capacity utilization, the industry's production capacity is divided into "head and tail" states. The total production capacity utilization rate of TOP6 companies exceeds 70%, while the average total production capacity utilization rate of companies ranked 7 and above is less than 30%. It is expected that in 2024, negative small and medium-sized enterprises will face:

(1) The price of negative electrode materials has further dropped. Mainstream artificial graphite 340mAh/g products will be less than 16,000 yuan/ton; (2) It is difficult to start discontinued projects; operating costs are high. Affected by low production capacity utilization, the equipment depreciation cost of over 95% of small and medium-sized enterprises is more than three times that of leading enterprises; (3) A small number of customer orders will be "divided" by the market; (4) The payment collection cycle of upstream anode suppliers is lengthened , the risk of repayment increases. GGII believes that under the pressure of oversupply in the industry and the squeeze of giants, small and medium-sized enterprises need to seek common ground while reserving differences to survive, and form misaligned competition among enterprises through product differentiation, market positioning segmentation, targeted development of raw materials and other measures. Despite structural overcapacity and the industry entering a reshuffle period, the anode material market still has room for growth. It is estimated that my country's anode material shipments are expected to reach 5.8 million tons in 2030, of which artificial graphite is still the mainstream in the market, with shipments exceeding 4.7 million tons.

It is expected that my country's graphitization production capacity will exceed 3.5 million tons/year in 2024, an increase of more than three times compared with the beginning of 2022. Under the long-term "involution", extreme cost reduction has become the core competitiveness of graphitization and downstream anode companies in the next 2-3 years. Affected by this, the industry may experience the following phenomena:

1) The graphitization self-matching rate may exceed 70%. Non-integrated graphitization projects incur packaging, transportation and other costs. In order to reduce costs, integrated or graphitization processing near supporting facilities (<500 kilometers) will account for more than 90%.

2) Currently, there are still many crucible furnaces producing artificial graphite products with <350mAh/g, giving companies the flexibility to accept orders. In 2024, graphitization will develop towards professional differentiation. Crucible furnaces are mainly equipped with 350mAh/g and above artificial graphite products, and chamber furnaces are mainly equipped with 340 and 345mAh/g artificial graphite products;

3) In the next two years, the peak price of graphitization processing may be between 10,000 and 12,000 yuan/ton. After three years, the proportion of continuous furnace applications will exceed 30%, which is expected to drive the average price of graphitization processing to further decline by more than 15%. .

In three years' time, the market share of third-party graphitization processing companies will be less than 30%. Most companies will be eliminated or merged. Those that survive will have the following characteristics:

1) Have medium/high sulfur coke graphitization processing capabilities;

2) Close to major customers, supporting large-scale anode (with orders for consumption) production base;

3) Obtain projects with lower electricity prices than peers (such as electricity price discounts, self-generation, etc.).