my country’s lithium cobalt oxide production is gradually declining and the market concentration is high

The chemical formula of lithium cobalt oxide is LiCoO2, and it mostly appears as gray-blue powder under normal temperature and pressure. As an inorganic compound, lithium cobalt oxide has the advantages of stable discharge, excellent cycle performance, high operating voltage, and high volumetric energy density. However, it also has the disadvantages of relatively poor stability, high cost, and short service life. Lithium cobalt oxide can be used as a cathode material in lithium-ion batteries and is widely used in the field of consumer electronics.

From the perspective of the downstream market, lithium cobalt oxide is mostly used to make lithium cobalt oxide batteries. The application terminals of lithium cobalt oxide batteries are mostly notebook computers, smart phones, tablets, electronic cigarettes and other products. Among them, smartphones accounted for the largest share of the overall market, accounting for 43.72%; followed by laptops, accounting for 27.41%; and e-cigarettes ranking third, accounting for 14.13%.

As my country’s smartphone production technology gradually advances, production costs gradually decrease, the price of smartphones is gradually accepted by mass consumers, and the market penetration rate gradually increases. However, after years of development, my country’s smartphone market has gradually become saturated, and affected by the epidemic, residents’ demand for replacement phones has gradually declined, resulting in a gradual decline in smartphone shipments. According to data released by the China Academy of Information and Communications Technology, as of the end of 2022, my country’s smartphone shipments were 264 million units, a year-on-year decrease of 23.10%. As an important component of smartphones, the market demand for lithium cobalt oxide batteries has gradually declined, indirectly affecting the development of the lithium cobalt oxide market.

According to the “In-depth Market Research and Investment Strategy Suggestions Report on Lithium Cobalt Oxide Industry 2023-2027” released by the Industrial Research Center, due to Affected by the epidemic, my country’s consumer electronics market has gradually shrunk, and the demand for lithium cobalt oxide has also gradually declined. Against this background, the operating rate of my country’s lithium cobalt oxide enterprises has gradually declined, resulting in a gradual decline in output. In 2022, my country’s lithium cobalt oxide production will be 76,800 tons, a year-on-year decrease of 23.76%.

At this stage, my country’s lithium cobalt oxide market is highly concentrated, showing a competitive pattern of one superpower and multiple strong players. The largest lithium cobalt oxide companies in my country mainly include Xiamen Tungsten New Energy, Jiangmen Keheng, Penghui Energy, Ruixiang New Materials, Bamo Technology, Mengguli, Dangsheng Technology, Shanshan Co., Ltd., CITIC Guoan, and Huayou Cobalt Industry, Dangsheng Technology, etc. Among them, Xiamen Tungsten New Energy has the largest market share, accounting for 38.7%; followed by Bamo Technology, with a market share of 12.9%; and Shanshan Co., Ltd. ranks third, with a market share of 11.7%.

Industry analysts said that with the continuous development of my country’s lithium cobalt oxide market, the production capacity structure has gradually upgraded, and market competition has become increasingly fierce. Since the production capacity of tail lithium cobalt oxide companies is small, product homogeneity is serious, and market competitiveness is relatively weak, therefore, customers prefer leading companies with strong corporate strength. As the living space of tail-end lithium cobalt oxide companies is gradually squeezed, they may be merged or eliminated in the future, and market concentration may further increase.