CCM: China’s LiPF6 market ushering favorable export tax refund in 2015 08-31-2016

In January 2015, the Chinese government officially raised the export tax refund rates for certain products, especially including the main raw material for Li-ion battery electrolyte, LiPF6. Thus, the exports of LiPF6 will be effectively supported and stimulated and it will further accelerate the large-scale production and commercialization progress of LiPF6 in China. 


Source: Baidu

From 1 Jan., 2015, according to the Notice on Adjusting the Export Tax Refund Rates for Certain Products jointly released by the Ministry of Finance of the People’s Republic of China and the State Administration of Taxation, the export tax refund rates for certain products shall be raised. Specifically, the main raw material for Li-ion battery electrolyte, lithium hexafluorophosphate (LiPF6), is included.


The export tax refund rates for these products rises significantly. It gives supports to relevant enterprises, stimulate the exports of related products and will alleviate the operation pressure from severe overcapacity of certain products in China. It is noteworthy that the overseas market may take the opportunity to undercut the price, which may trigger a new export price war. Besides, relevant enterprises should make enough preparation in advance, in order to deal with the international trade friction brought by the tendency of trade protectionism in the future.

According to CCM, the tariff regulations and tariff items for LiPF6 were newly added in the 2015 Tariff Execution Plan published by the General Administration of Customs of the People’s Republic of China.


In recent years, due to the technological breakthrough and production capacity expansion, along with the upstream and downstream market not completely expanded and supply exceeding demand, the price and the gross profit margin of LiPF6 in China began to decline from the high monopolistic level. However, the rapid development of the alternative energy vehicle industry in 2014 drove the overall development of Li-ion battery and its upstream industry chain. The market of LiPF6 went down more slowly and tended to be stable. After the adjustment, the export tax refund rate for LiPF6 increased from 0% to 13%. It is favorable to the LiPF6 upstream and downstream industry chain.

In terms of the LiPF6 industry and its upstream industry, the adjustment of export tax refund rates will strengthen the competitiveness of enterprises regarding the exports of LiPF6 and stimulate enterprises to explore the international market. What’s more, with the exploration of the international market, the broadened marketing channel will also increase the consumption of the production capacity and bring in more revenue. This will attract LiPF6 enterprises and related upstream fluorochemical enterprises to engage in developing LiPF6. In this way, the large-scale production and commercialization progress of LiPF6 in China will continue to be accelerated.


As for the downstream industry of LiPF6, with the increasing input, the technology and quality of the product will be further improved and the gap between the imported raw materials and the domestic raw materials will be narrowed. It can provide raw materials of high quality and competitive price for the high value added power Li-ion battery that develops in large scale. It will also be favorable to the reduction of the cost for power Li-ion battery, so as to propel the further promotion of the alternative energy vehicle industry.


In 2015, since the promotion of the alternative energy vehicle industry will be accelerated, the Li-ion battery industry, especially the high value added power Li-ion battery, will usher large investment and development. This will drive the demand for electrolyte rapidly and the LiPF6 industry will also usher an enormous development opportunity. Specifically, the Chinese government will continue to make efforts to achieve the goal that the accumulative quantity of production and sale for battery electric vehicle (BEV) and plug-in hybrid electric vehicle (PHEV) will reach 500,000 by 2015. Therefore, in 2015, with abundant government subsidy and policy support, CCM predicted that the accumulative quantity of production and sale for alternative energy vehicle in China was expected to increase from 100,000 in 2014 to 200,000-300,000 in 2015.  


In addition, CCM believed the adjustment of the export tax refund for LiPF6 would be a great help for China to continuously expand its market share in the global LiPF6 and electrolyte market. At present, the global production capacity of LiPF6 is about 12,000 t/a. On the basis of the development trend of the downstream industry, the global demand for electrolyte is estimated to reach approximately 100,000 tonnes in 2015. According to the proportion of about 8:1, 12,500 tonnes of LiPF6 will be in demand. Even according to the operating rate of 90%, the current production capacity will not satisfy the global demand for LiPF6 in 2015. Meanwhile, considering the global Li-ion battery industry status, Japan, South Korea and China account more than 90% of the global production capacity of Li-ion battery. Based on the cost advantage in China’s fluorochemical industry, the large-scale production of LiPF6 is beneficial to the quantity improvement and the price fall of electrolyte. Hence, the production capacity of electrolyte will be transferred to and centralized in China. It is predicted that about 80%-90% of electrolyte in the world will be supplied by China.


As the important raw material for Li-ion battery electrolyte, LiPF6 accounts for about 40%-50% of the cost of electrolyte. Before 2011, since LiPF6 required advanced technology, China’s LiPF6 industry did not develop in scale and relevant downstream products mainly relied on imports from Japan. In the meantime, several Japan-based enterprises, such as Stella Chemifa Corporation, Kanto Denka Kogyo Co., Ltd. and Morita Chemical Industries Co., Ltd., occupied almost 90% of the global market share. However, after 2011, with the technological breakthrough of domestic enterprises, some domestic manufacturers, such as Do-Fluoride Chemicals Co., Ltd., Jiangsu Jiujiujiu Technology Co., Ltd., Tianjin Jinniu Power Sources Material Co., Ltd. and Guangzhou Tinci Materials Technology Co., Ltd., rapidly expanded their production capacity for LiPF6 and successfully broke the monopoly of Japan-based enterprises on Chinese market.

About CCM:

CCM is the leading market intelligence provider for China’s agriculture, chemicals, food & ingredients and life science markets. Founded in 2001, CCM offers a range of data and content solutions, from price and trade data to industry newsletters and customized market research reports. Our clients include Monsanto, DuPont, Shell, Bayer, and Syngenta. CCM is a brand of Kcomber Inc.


For more information about CCM, please visit or get in touch with us directly by emailing or calling +86-20-37616606.

Tag: LiPF6

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