Altech Chemicals Limited commissions detailed study of 4N+ HPA market in order to raise financing. CRU considers this complex and emerging ecosystem.
In January 2019, CRU Consulting was approached by Altech Chemicals, in search of a reputable independent expert to provide greater transparency on this little-known market.
CRU began a market outreach programme to engage with industry participants and dig even deeper than our previous HPA research had gone (published in August 2018).
Following publication of our findings, numerous industry participants have made contact with us, seeking further information, which supports our view that the HPA market is starting to gather large-scale interest.
Following completion of a more rigorous demand model, coupled with extensive market discussions, CRU has found the unconstrained demand forecast for 4N+ (99.99% or greater) HPA to be significantly stronger than initial estimates from 2018, where it was estimated at 92,900 tonnes (2025). In this recent market report, CRU estimates that 4N+ HPA could in theory grow at 30% p.a. from 19,000 tonnes (2018) to 272,000 tonnes (2028). However, more detailed examination shows that this growth will likely be constrained by supply limitations, and that such unconstrained demand growth would lead to a large-scale deficit that would consequently spike prices to untenable levels.
CRU estimates that HPA in powder form, used in lithium ion battery (LIB) separators, could reach 187,000 tonnes (2028), were sufficient supply made available. Meanwhile, HPA in the pellet/bead form used in light-emitting diode (LED) substrates could reach 85,000 tonnes (2028), and is expected to exhibit greater price inelasticity, since sapphire is by far the most widespread substrate material in the established solid-state lighting industry.
In explaining its 4N+ HPA market growth forecast, CRU asserts that:
- the demand for ceramic coated separators (CCS) in LIB applications is genuine and will rapidly proliferate, as more energy-dense batteries arrive to serve the surging electric vehicle (EV) market; and that
- manufacturing trends in LED production – which itself has an excellent growth trend – have recently moved in favour of larger sapphire wafers: this will have profound (positive) consequences for the 4N+ HPA market, as the push for defect-free 6” and 8” wafers will drive demand for higher-purity feedstock.
Altech’s report underpins financial discussions with a syndicate of banks that are considering a large capital expenditure. As such, our prior experience, detail, and ability to inspire investor confidence in our projections were the key factors influencing their choice of analysis support.
Let me first congratulate you and your team on an excellent market report. A great job and well done on a very challenging opaque market. I acknowledge the amount of work and details presented in the report. Once again outstanding and well done.
Iggy Tan Managing Director, Altech Chemicals Ltd
HPA builds on CRU’s excellent knowledge of battery materials, and also brings us even further into the discussion of the green economy by considering energy-efficient lighting. I imagine there are a lot of big-name companies who are about to be surprised by the confluence of demand, and who would do well to get to know their supply chain better.
Toby Green Project Manager, Senior Consultant, CRU