Yuneng to Expand LFP and LMFP Cathode Capacity to Meet Battery Market Growth

Yuneng

$899 Million Investment Targets Higher Energy Density Materials

Hunan Yuneng, China’s largest lithium iron phosphate (LFP) cathode active material producer, will significantly expand production capacity to serve surging demand in the lithium-ion battery sector. The company plans to raise 4.8bn yuan ($899mn) for a new project producing 320,000 t/yr of lithium manganese iron phosphate (LMFP), 75,000 t/yr of ultra-long cycle LFP, and 100,000 t/yr of iron phosphate feedstock.

The LMFP line, located in Anning, Yunnan province, will also be able to produce LFP. Yuneng expects construction to finish within four years. Meanwhile, the ultra-long cycle LFP and iron phosphate plants in Fuquan, Guizhou province, will be built within 12 months, strengthening the company’s diversified product portfolio.

Performance Advantages and Market Competition

LMFP cathodes provide higher energy density, longer driving ranges for EVs, better winter performance, and lower manufacturing costs than standard LFP. However, they have shorter life cycles and weaker charge-discharge capacity. Major players such as CATL, BYD, and Eve Energy are also investing in LMFP technology, intensifying competition in the high-performance cathode market.

Yuneng achieved 101% LFP capacity utilization in 2024, producing 735,462t—up 46% from 2023. Sales reached 710,565t, with 41% directed to the energy storage sector. LFP batteries continue to dominate China’s lithium-ion battery market, holding an 80% production share from January to April 2024, far exceeding the share of ternary chemistries such as NCA/NCM.

Strategic Outlook for Cathode Materials Expansion

By expanding LFP and LMFP output, Yuneng positions itself to capture additional market share as both EV adoption and energy storage demand accelerate. The cost advantage of LFP remains a key factor in China’s battery market dominance, while LMFP technology offers potential for premium applications once lifecycle limitations are addressed.

The Metalnomist Commentary

Yuneng’s investment demonstrates how Chinese cathode producers are racing to scale capacity in response to both domestic and global demand. While LFP will remain the dominant chemistry in China’s battery market, LMFP could emerge as a niche solution for applications requiring higher energy density—if manufacturers can resolve its durability challenges.

Guizhou Phosphate LFP Plant Breaks Ground to Expand Battery Materials Production

Guizhou Phosphate

Guizhou Phosphate Chemical, a state-owned Chinese firm, has started construction on a major LFP plant in southwest China. Located in Kaiyang, Guizhou, the facility is designed to produce 600,000 tonnes per year of lithium iron phosphate, with full commissioning expected by 2028. The plant is part of a broader push to enhance China’s control over the lithium battery supply chain.

Multimetal Facility to Support China’s NEV Ambitions

The Guizhou Phosphate LFP plant is part of a larger complex valued at ¥33.1 billion ($4.5 billion). In addition to LFP materials, it will produce iron phosphate, lithium carbonate, copper, and titanium dioxide. The first phase, focused solely on LFP, will be operational by 2026. This aligns with China’s drive to support domestic production amid rising demand from new energy vehicles (NEVs) and grid-scale storage.

Oversupply Looms Despite Surging LFP Output

While LFP shipments in China surged 48% year-over-year to 2.43 million tonnes in 2024, market value dropped by 30% due to oversupply. The Guizhou Phosphate LFP plant joins other large-scale projects, including Tsingshan’s mega-complex in Zhijin County, further crowding the market. This rapid expansion raises concerns about long-term price stability and profitability within the LFP sector.

The Metalnomist Commentary

The Guizhou Phosphate LFP plant exemplifies China’s aggressive industrial scaling in battery materials. While strategic for EV dominance, unchecked expansion may strain margins and intensify global competition in LFP supply chains.

CNGR Raises CAM Precursor Output and Sales in 2024

CNGR

CNGR Boosts Output Across Key Battery Materials

China’s CNGR Advanced Material increased its cathode active material (CAM) precursor production and sales in 2024, reflecting robust battery sector demand. Total CAM precursor output rose by 2.4% year-on-year to 291,019 tonnes, including nickel-cobalt-manganese (NCM) precursor, cobalt tetroxide, and iron phosphate.

The company’s operating capacity averaged 63%, with cobalt tetroxide production running at 102% capacity due to strong electronics sector demand. Production reached 192,548t NCM precursor, 26,922t cobalt tetroxide, and 71,549t iron phosphate, confirming balanced growth across its portfolio.

Sales Expansion and Global Strategic Shifts

CNGR’s total CAM precursor sales climbed 11% to 302,060 tonnes in 2024, outpacing production growth due to efficient logistics and stable client demand. The firm operates major production hubs in Hunan, Guizhou, and Guangxi, and launched Morocco’s first ternary precursor lines in January 2024.

However, CNGR will exit its Finland project, citing regulatory uncertainty and poor market conditions in Europe. This strategic pivot emphasizes the firm’s renewed focus on Asia and North Africa as growth zones.

Customer Base and Metal Diversification Efforts

CNGR supplies materials to leading battery producers including CATL, LG Chem, Samsung SDI, and Tesla, as well as CAM firms like XTC, Beijing Easpring, and Ningbo Ronbay. It began cobalt metal deliveries in July 2024 from its new 2,000t/yr facility in Guangxi, marking a downstream integration move.

This expansion into refined cobalt suggests a broader vertical integration strategy aimed at reinforcing CNGR’s presence in the global battery value chain.

The Metalnomist Commentary

CNGR’s 2024 performance shows strong resilience and strategic recalibration. While European uncertainties prompted a project withdrawal, the firm’s pivot toward Morocco and cobalt refining in Guangxi signals regional diversification and resource control. Expect CNGR to deepen its influence in battery metals amid growing EV demand.

China's Tsingshan Partners in Major LFP Project

Collaborative Development in Guizhou

China's largest stainless steel producer, Tsingshan, is teaming up with Huayou Cobalt, a leading battery materials and metals producer, and Huafon, an adipic acid manufacturer, to develop a significant phosphate-coal-chemical integration project in Zhijin county, Guizhou province. The project, valued at 73 billion yuan ($10.3 billion), aims to establish a comprehensive production complex.

The new facility will feature a range of production lines, including 1.5 million tons per year of iron phosphate, 800,000 tons per year of lithium iron phosphate (LFP), and 1 million tons per year of dimethyl carbonate. Additionally, it will produce 800,000 tons per year of synthesis ammonia, 500,000 tons per year of methanol from coke oven gas, and 5 million tons per year of coking. Zhijin county, known for its rich mineral resources, is an attractive site due to its coal reserves exceeding 15 billion tons and phosphate rock reserves nearing 3.5 billion tons.

Industry Trends and Government Regulations

The growing demand for LFP materials, driven by the electric vehicle sector, has led many Chinese firms to expand their capacities. For instance, in August, CATL, China's largest power battery manufacturer, announced plans to collaborate with Jiangxi Shenghua New Material on a new plant. However, concerns about potential oversupply have prompted the Chinese government to implement measures to curb overcapacity and encourage technological advancements. Xinjiang International Industry's decision to terminate its LFP energy storage battery project in June reflects these regulatory pressures.