Chemical firms invest in Li-ion

The blog’s colleague Nigel Davis wrote a recent insight about chemical companies racing to enter the lithium ion batteries market.

Nigel pointed out BASF’s recent announcement of a three-digit million euros investment in to R&D and production of battery materials over the next five years. BASF’s first electrolyte formulations for Li-ion batteries will be on sale by the end of this year. The electrolytes are complex mixtures, based on organic carbamates, that are needed to transport charge inside the battery and help improve performance.

BASF is constructing a plant to produce a range of battery materials in Elyria, Ohio, in the US. Part of its multi-million Li-ion investment will be the $50m earmarked for Li-ion battery cathode production, which is due to start in 2012. In May, BASF formally entered the electrolytes for lithium ion batteries market with the formation of its global electrolytes team in its intermediates division.

In the same week that BASF announced its investment, Dow announced the formation of a joint venture with Japanese chemical company Ube Industries in the manufacture and marketing of formulated electrolytes for lithium ion batteries. The 50-50 JV named Advanced Electrolyte Technologies, is expected to be finalized this year and its first manufacturing facility is expected to be built at Dow’s Michigan Operations’ site in Midland for startup in 2012.

The blog both mentioned BASF and Dow’s growing investments in lithium since October last year. Nigel also mentioned German chemical company Evonik as well as Japanese chemical companies Mitsui Chemical, Kureha and Itochu as all have been investing in the lithium ion market as well.

Today, Huntsman announced its own plans to meet the needs of the global lithium ion battery market by expanding its Ultrapure solvent electrolytes production capacity in Conroe, Texas, and to also investigate a new North American integrated carbonates plant to produce cyclic and linear carbonates.

Huntsman Performance Products currently has 80 million pounds of carbonates capacity at its Conroe plant.

According to a February Clean Technologies report from US investment firm Jefferies & Co., the automotive market for lithium ion batteries is forecasted at an incremental $35b market opportunity by 2020 – exceeding the size of existing global automotive battery market (<$20b) and almost doubling the size of the current global battery industry.

Lux Research, meanwhile, reportedly forecasted a catastrophic supply and demand imbalance in the lithium-ion battery sector over the next decade (as according to Alt Energy Stocks blog). On the supply side Lux Research predicts that global manufacturing capacity will ramp to about 21,000 MWh by next year and climb to almost 30,000 MWh by 2015.

On the demand side, Lux’s optimistic case based on $200 oil predicts annual battery sales of about 6,000 MWh in 2015 ramping to 22,500 MWh by 2020. Under their more conservative $140 oil price scenario, demand won’t hit 6,000 MWh until 2020.

Other recent announcements in the lithium-ion batteries include International Battery forming a collaboration and license agreement with Hydro-Québec to further develop water-based manufacturing processes of lithium-ion batteries, and General Motors and the U.S. Department of Energy’s Argonne National Laboratory reached a worldwide licensing agreement to use Argonne’s patented composite cathode material to make advanced lithium-ion batteries that last longer between charges and can charge at higher voltages.

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