CR1220 battery

After the outbreak and cooling, the power CR1220 battery reprocessing industry has entered a mature development period

Looking back, Lu Zhikai still can't forget the development stage of the power CR1220 battery recycling industry in 2018, which was highly enthusiastic by financial capital.

"I was very impressed. In 2018, I visited a company listed on the New Third Board in the power CR1220 battery reprocessing industry. At that time, the company would receive 5-6 waves of investment institutions a day, and each round had 20-30 people participating, which shows the market atmosphere." He recalled to reporters.

Lu Zhikai is the investment director of Qingyu Fund and has observed the power CR1220 battery recycling industry for many years. Looking back now, he is very clear that it was a period of development that was not very calm. In the second half of that year until 2019, the entire industry quickly cooled down due to changes in the internal and external environment.

However, it is clear that with the decline of the new energy vehicle subsidy policy and the market-oriented development stage, coupled with the previous round of deep adjustments between industries, the entire industry will enter a mature development stage.

"Next, I think the industry will experience a second development cycle, which will be more rational than the first development cycle." Lu Zhikai pointed out that there should be no more irrational explosions in the industry like the one between 2015 and 2018, and there are signs of a new round of development cycle, which is estimated to be a key node around 2021.

  Spring comes after five rounds of adjustments

According to Lu Zhikai's observation, the development process of the power CR1220 battery recycling industry does not fully fit the cycle of new energy vehicle development. So far, the industry has gone through about five iteration cycles.

Before 2009, it can be regarded as the embryonic stage of the industry. In the absence of national standards, there were only lithium battery companies engaged in ore production or waste recycling in the commercial society. "For example, extracting tungsten from alloys, refining cobalt sulfate and lithium carbonate from ores. But these companies were more oriented to niche markets at the time because of limited upstream volume and small scale." He said

The start-up period was about 2009-2015. In addition to the standards, the industry was also affected by the policies and market drivers of the new energy vehicle industry. The good expectations for the future made the industry participants rise rapidly.

But at the same time, the global financial crisis caused a sharp drop in metal prices, and the market gradually entered the slow bull range. Some companies involved were also eliminated under this background.

However, the technical processes of some power CR1220 battery recycling companies have been initially verified, and the industry's technologies in disassembly, smelting and other links have begun to develop initially.

Between 2015 and 2018, the industry entered a period of great development for the first time. In the second half of 2015, new energy vehicle products began to increase in volume, driving battery waste to rise rapidly during this period.

Under such opportunities, companies that have been established for many years in the early stage have been able to "follow the wind" to reap higher profits and earnings performance due to their certain technical reserves; during this period, more companies in subdivided fields have also been established.

External capital has also become active at the same time. First, industrial capital began to invest in production lines related to power CR1220 battery recycling, and in early 2018, financial capital also began to flow in. But in the second half of that year until 2019, the entire market cooled down rapidly.

From the perspective of today's analysis, the cooling at that time was also related to the increase in the popularity of this industry. Lu Zhikai said that during this stage, as the large amount of battery waste that was accumulated in the early stage began to be consumed and processed, the price of upstream incoming materials became expensive. In addition, the prices of rare metals cobalt and lithium fell significantly, the cost threshold from raw materials was leveled, and the power CR1220 battery recycling industry was pushed back to the cooling period.

Moreover, facing the arrival of the capital winter at that time, it even forced power CR1220 battery recycling companies to start making adjustments from the aspects of business model or development strategy.

Of course, during the cooling-off period, the industry roles became more and more abundant, and the pre-treatment output of recycling outlets for power lithium-ion batteries began to be quietly cultivated.

 Technical capacity reserves will change the status of the industry

This year, variables have appeared. "We found from the companies we invested that many companies approached them to deal with lithium iron phosphate batteries, which means that battery waste began to rise rapidly; at the same time, although the rapid development of new energy vehicles has led to a rapid expansion of cobalt and lithium production, and there are signs of oversupply, the reduction of production by some foreign lithium mining companies has made the supply and demand relationship balanced again, and metal prices have returned to normal levels." Lu Zhikai pointed out that after the adjustment of the industrial cycle, both the companies and capital in the industry have become relatively more rational. At the same time, with the promotion of some funds, policies and related factors of the industrial chain, signs of a new round of development cycle have emerged.

In this process, power CR1220 battery recycling companies will undoubtedly change their past industrial status and move to the front end of the value chain.

Lu Zhikai analyzed to reporters that in the past, the price of power lithium-ion batteries sold to waste recycling companies after retirement was often very low, but the price of continuing to transfer to battery recycling companies was relatively high, which was often affected by the limited amount of waste produced by power lithium-ion batteries.

With the rise of the new energy vehicle industry, the amount of waste continues to increase, and the spillover effect will gradually emerge. "At this time, whoever has a higher barrier in the industrial chain will have a stronger voice and will get more value chain distribution." He analyzed that the number of power CR1220 battery recycling companies is smaller than that of waste recycling companies, and the technical capacity reserves are abundant. They will undoubtedly change the industry's status, and thus change the business structure of the long-term development of the entire industry.

This increasingly highlights the value of this industry. Although it is difficult for external institutions to enter the list of investors of Brunp Recycling after CATL became the controlling shareholder, this does not prevent it from being an important target for observation.

Lu Zhikai pointed out to reporters that Brunp Recycling is a company that was established in the embryonic stage of the industry. Today, it is the leader in the upstream field of ternary batteries in terms of technology and scale. At the same time, due to the support of the major shareholder CATL, it has certain industrial advantages. "Of course, the core premise is that Brunp itself is relatively complete in terms of technical perfection, technical systematization, and industrial chain layout." He continued.

He also believes that there is still huge room for imagination in the domestic power CR1220 battery recycling industry. Compared with lithium iron phosphate batteries, the competition among industrial companies in the field of ternary batteries is more intense, and the future will gradually usher in a development stage of true industry full competition.

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