NMP market prospect and reef in TWH Era

The lithium battery industry has entered a rapid development channel, and the demand for lithium batteries as the core components of electric vehicles and energy storage stations has soared, which has also driven the rapid growth of upstream and downstream enterprises in the lithium battery industry. As an indispensable production auxiliary material of lithium battery, NMP also takes advantage of the development trend.

NMP is a very important auxiliary material for the production of lithium-ion battery electrodes. It is the most commonly used polar solvent in the front batching process of lithium-ion batteries. Facing the TWH era, opportunities and challenges coexist in the NMP market.

From the perspective of opportunities, NMP has strong market demand and large profit space. Due to the rapid expansion of lithium battery enterprises, there is a huge incremental demand for NMP, but the supply of BDO raw materials is insufficient, which leads to an increase in the processing cost of synthetic NMP. Superimposed on the tight supply of overall NMP, the price of recovery and rectification NMP has increased, which has continuously improved the profits of NMP enterprises, and the sales volume, unit price and profit margin have continued to rise.

The increment is greater than the loss. Because the recovery rate of NMP is generally higher than 80%, its loss rate in the field of lithium battery is small, and most NMP can be recycled. This feature leads to the increasing stock of NMP in the field of lithium batteries. When the stock reaches a certain extent, it will reduce the demand for synthetic NMP, making the supplement and consumption of NMP in the field of lithium batteries equal.

However, due to the rapid expansion of lithium battery field for a long time in the future, the incremental demand of NMP stock in lithium battery field is far greater than the loss, resulting in the need for a large amount of supplement. However, NMP belongs to the chemical industry, with a long construction cycle, forming a market gap and promoting the high-level operation of NMP.

From the perspective of challenges, the future development of NMP will also face the risks of industrial policy restrictions, declining potential profits and intensified market competition.