BYD LFP processing deal expands supply chain with Xingfa tolling capacity

BYD, LFP

The BYD LFP processing deal adds fresh capacity as China’s EV and storage demand rises. Hubei Xingfa Chemical will process 80,000 t/yr of lithium iron phosphate for BYD. Meanwhile, the agreement reinforces BYD’s diversified LFP sourcing strategy.

The partnership runs through a subsidiary-to-subsidiary processing framework. Hubei Xingshun New Material signed with Qinghai Fudi Industrial for the tolling work. However, the parties did not disclose the start date.

Tolling capacity supports fast-growing LFP demand

The contract targets 80,000 t/yr of LFP processing over a two-year term. The deal can renew for one additional year with mutual consent. Therefore, the structure gives both sides flexibility as demand shifts.

BYD keeps expanding battery deployments across power and storage markets. BYD installed 258.282GWh in January–November, up 51pc year on year. As a result, BYD keeps tightening upstream security for LFP and related inputs.

Phosphorus chemistry players deepen battery-material integration

Xingfa has built a broader platform beyond traditional phosphorus chemicals. The company has commissioned 100,000 t/yr iron phosphate capacity and 80,000 t/yr LFP capacity. Meanwhile, it has also built 100,000 t/yr lithium dihydrogen phosphate capacity.

BYD continues to source LFP from multiple producers to avoid bottlenecks. Key suppliers include Hunan Yuneng and Shenzhen Dynanonic. BYD also buys from Jiangsu Lopal, Zhejiang Youshan, and Shandong Fengyuan.

The Metalnomist Commentary

The BYD LFP processing deal signals that tolling models now matter in China’s battery materials race. However, BYD’s supplier diversity still acts as its main hedge. Therefore, investors should track renewal terms and upstream phosphate integration.