China Anode Material Production Cuts Deepen as Putailai Slows Output

China Anode Material

China anode material production cuts intensified in 2024 as Shanghai Putailai New Energy reduced both output and sales due to oversupply and price pressure. The firm’s production dropped 18% to 136,707 tonnes, while sales declined 15% to 132,311 tonnes compared to 2023. The decline underscores the challenges faced by China’s battery material producers amid a saturated market.

Delays and Terminations Amid Market Imbalance

Putailai postponed the launch of its Sichuan plant’s first phase due to weak anode prices and funding constraints. Originally slated for December 2024, the 100,000 t/yr capacity line began operation in February. The second phase, also with 100,000 t/yr capacity, is now expected to come online by late 2026. Meanwhile, the company canceled its planned Swedish plant after failing to secure government approval.

Oversupply Challenges China’s Battery Sector

Despite strong EV sector growth, China’s anode material production cuts highlight growing pains in the supply chain. In 2024, China’s production capacity reached 3.5mn t/yr, but only 2.12mn tonnes were produced. Domestic demand stood at 1.83mn tonnes, according to ICC Sino, leaving a large volume of underutilized capacity.

The Metalnomist Commentary

China anode material production cuts reflect deeper structural issues in the battery materials market. Without pricing recovery or export diversification, producers like Putailai may face further consolidation or capacity rationalization.