PLS Lithium Phosphate Offtake Signals Shift Toward Midstream Battery Materials

PLS Lithium

PLS lithium phosphate offtake with China’s Ningbo Ronbay New Energy Technology marks a strategic step by the Australian lithium producer into higher-value battery materials. The agreement covers lithium phosphate from PLS’ midstream lithium refining demonstration plant.

PLS lithium phosphate offtake gives the company an early customer pathway as it tests whether spodumene can be converted into an intermediate chemical product with broader downstream appeal. The plant is scheduled to deliver first product in the third quarter of 2026.

PLS lithium phosphate offtake also links the company directly with Ronbay, one of the world’s largest lithium iron phosphate cathode material producers. Ronbay will provide technical support as PLS works to optimise product quality and specification.

The agreement’s price and volume details were not disclosed. But the pricing structure will broadly reference lithium chemical prices, with a proportional mechanism similar to spodumene pricing.

Lithium Phosphate Could Shorten the LFP Supply Chain

PLS’ demonstration plant is designed to produce more than 3,000 t/yr of lithium phosphate. It will consume about 27,000 t/yr of spodumene.

The company took full ownership of the plant from former joint-venture partner Calix in February. That gives PLS more control over the development route as it moves beyond conventional lithium concentrate sales.

The strategic importance lies in the possible use of lithium phosphate as a direct feedstock for LFP cathode production. Some LFP cathode producers are testing lithium phosphate instead of lithium carbonate because it could shorten processing steps and reduce total production costs.

This matters because LFP batteries are gaining share in electric vehicles and energy storage systems. Cathode producers want lower-cost, reliable and scalable lithium inputs that can support high-volume manufacturing.

If lithium phosphate can meet strict cathode specifications, PLS could access a new customer base. Instead of selling only to lithium hydroxide or carbonate converters, it could sell directly into cathode material supply chains.

That would move PLS closer to battery manufacturers and allow it to capture more margin inside the lithium value chain.

Quality Testing Will Determine Commercial Potential

The opportunity remains at an early stage. PLS has warned that lithium phosphate must meet demanding quality requirements before it can become a commercial cathode feedstock.

Battery material customers require tight control over impurities, consistency, particle characteristics and chemical performance. A product that works technically at small scale must still prove reliability across repeated production.

Ronbay’s role is therefore important. As a major LFP cathode producer, it can provide practical feedback on product suitability, processing performance and downstream qualification needs.

The agreement also reflects a broader trend in lithium markets. Producers are no longer focused only on mining and concentrate production. They are looking for midstream products that can reduce processing complexity and improve customer access.

For PLS, lithium phosphate could serve multiple markets. It may supply existing lithium chemical producers, while also opening a direct route to cathode manufacturers.

The demonstration plant will test whether that strategy can move from concept to commercial scale. If successful, it could give spodumene producers a new pathway into battery materials without fully entering carbonate or hydroxide production.

The Metalnomist Commentary

PLS’ lithium phosphate strategy is a clear attempt to move higher in the battery value chain without jumping directly into full chemical conversion. The key test will be whether cathode makers accept lithium phosphate as a reliable feedstock at scale, not just as a technical possibility.

Lopal and EVE Energy Ink $694mn LFP Cathode Supply Deal

Lopal

Strategic Partnership for Malaysian Battery Production

Chinese lithium iron phosphate (LFP) cathode producer Jiangsu Lopal has signed a landmark supply agreement with EVE Energy’s Malaysian subsidiary, underscoring the growing importance of Southeast Asia in the global battery supply chain. The five-year deal covers the delivery of 152,000t of LFP cathode material between 2026 and 2030, with a total estimated value exceeding 5bn yuan ($694mn). The agreement includes flexibility clauses allowing EVE Energy to adjust order volumes within predefined limits, while pricing will be determined quarterly to reflect market conditions.

EVE Energy began operating its first overseas battery manufacturing facility in Malaysia in February 2025. The plant, designed with an annual output capacity of 680mn cylindrical batteries, primarily serves the electric tool and electric two-wheeler markets. By sourcing LFP cathode materials locally within Asia, EVE Energy aims to strengthen supply chain resilience and reduce exposure to cross-border trade risks.

Global LFP Supply Chain Diversification

Lopal has emerged as one of China’s most prominent LFP cathode producers since acquiring the business from Shenzhen BTR New Energy Material. The company operates large-scale production complexes across Jiangsu, Shandong, Tianjin, Sichuan, and Hubei, giving it significant domestic manufacturing coverage and the ability to meet large-volume contracts. In addition to EVE Energy, Lopal has also secured long-term supply deals with Cornex and Ford Motor Company this year, further expanding its customer portfolio.

This deal comes amid escalating US–China trade tensions, particularly in the energy storage sector. The United States has imposed a 40.9pc tariff on Chinese-produced LFP batteries for energy storage systems (ESS), driving manufacturers to diversify production locations. China still produces over 90pc of the world’s LFP batteries, but other countries are rapidly entering the market. LG Energy Solution (LGES) in South Korea has already started mass production of LFP batteries in the US, signaling a shift in global production strategies.

With geopolitical pressures, fluctuating raw material prices, and the ongoing global push for electrification, long-term supply contracts like this one between Lopal and EVE Energy are becoming increasingly critical for securing stable production pipelines and competitive advantage.

The Metalnomist Commentary

This agreement reflects a broader industry shift toward decentralizing battery material production across multiple regions to reduce geopolitical and logistical risks. As global demand for LFP batteries accelerates, Southeast Asia is poised to become a crucial manufacturing hub, offering both cost efficiency and strategic proximity to major markets.

XTC New Energy LFP LMFP Capacity Expansion Targets Higher-Density Battery Materials

XTC New Energy

XTC New Energy LFP LMFP capacity will expand in Sichuan as the Chinese battery materials producer adds another 40,000 t/yr of lithium iron phosphate and lithium ferro-manganese phosphate production. The second-phase project will be built in Ya’an city and is expected to start production in June 2028.

XTC New Energy LFP LMFP capacity at the Ya’an plant will reach 80,000 t/yr after both phases are completed. The first phase already provides 40,000 t/yr of LFP capacity, while the new phase will add flexible LFP and LMFP output.

XTC New Energy LFP LMFP capacity expansion reflects China’s continued investment in lower-cost and manganese-enhanced battery chemistries. The project will be operated by subsidiary Ya’an XTC New Energy, with total investment expected at 743mn yuan.

The move comes as Chinese battery material producers position for growing power battery demand and greater interest in manganese-based cathode active materials.

LMFP Gains Momentum as Producers Seek Better Energy Density

LMFP is gaining attention because it can offer higher energy density than conventional LFP. This makes it attractive for battery makers seeking to improve driving range while keeping costs below higher-nickel chemistries.

However, LMFP still faces trade-offs. Batteries using LMFP cathode active material generally have shorter cycle life and lower charge-discharge efficiency than LFP batteries.

This means LMFP is not a simple replacement for LFP. Instead, it is likely to develop as a complementary chemistry for applications where higher energy density is more valuable than maximum cycle life.

The expansion also shows how manganese is becoming more important in battery materials. Manganese-based chemistries can reduce reliance on more expensive or supply-sensitive metals while supporting performance improvements.

For XTC, adding LMFP capacity gives the company more flexibility. It can serve established LFP demand while preparing for customers that want manganese-enhanced phosphate materials.

China’s Cathode Supply Chain Expands Into Manganese-Based Materials

XTC is not alone in expanding LMFP capacity. Several Chinese battery material producers are adding or building manganese-based phosphate projects.

Ningxia Hengchuang Nami began building the first phase of a 30,000 t/yr LMFP plant in Yinchuan in March. Hunan Yuneng, China’s largest LFP producer, is also building an LMFP materials plant.

Jiangxi Greatpower launched the first phase of a 20,000 t/yr LMFP plant in Pingxiang in January. These projects show that China’s battery materials industry is preparing for broader adoption of LMFP.

The trend is strategically important for the cathode supply chain. LFP has already become a major chemistry in electric vehicles and energy storage because of its cost advantage, safety and long cycle life.

LMFP could extend that platform by adding more energy density while preserving some of LFP’s cost and safety benefits. If technical limitations improve, LMFP may become a larger part of China’s battery chemistry mix.

For raw materials, the shift could support manganese demand in battery applications. It also reinforces China’s lead in scaling new cathode chemistries from pilot production to industrial capacity.

The Metalnomist Commentary

XTC’s Ya’an expansion shows that China’s battery materials race is moving beyond simple LFP scale. LMFP is becoming a serious development path because it offers a practical route to higher energy density without fully moving into costlier high-nickel systems.

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.

Lopal LFP supply deal with CATL underpins global battery expansion

Lopal

The Lopal LFP supply deal with CATL marks a major step in China’s global battery materials strategy. Under the agreement, Jiangsu Lopal will supply 157,500t of LFP cathode material to CATL’s overseas plants from 2025 to 2031. As a result, the Lopal LFP supply deal with CATL secures long term CAM supply for CATL’s international gigafactories and EV customers.

Global significance of the Lopal LFP supply deal with CATL

The Lopal LFP supply deal with CATL is valued at more than 6bn yuan, highlighting its strategic weight. The contract will feed CATL’s overseas battery factories, supporting EV and energy storage growth outside China. Therefore, CATL locks in a predictable stream of LFP CAM while scaling its non Chinese manufacturing footprint.

LFP is gaining share in global batteries because it offers lower cost and strong safety performance. However, reliable cathode supply remains crucial as more OEMs shift from nickel rich chemistries. The Lopal LFP supply deal with CATL supports this trend by linking a leading LFP producer to the world’s largest cell maker.

Lopal has grown rapidly since acquiring BTR’s LFP business in 2021. Its output reached 184,697t in 2024, up 56pc year on year. Meanwhile, LFP sales rose 65pc to 178,287t, confirming strong downstream demand. This growth gives CATL confidence in Lopal’s ability to deliver under a long dated contract.

Lopal’s internationalisation push and new LFP capacity

The CATL agreement sits at the centre of Lopal’s internationalisation strategy. Lopal already holds term contracts with Cornex, Ford and LG Energy Solution. Therefore, the company is building a diversified global customer base across Chinese and foreign cell makers and OEMs.

Lopal’s production network spans several Chinese provinces, supporting scale and logistics flexibility. Major bases operate in Jiangsu, Shandong, Tianjin, Sichuan and Hubei. This footprint helps balance regional feedstock, power and permitting conditions. It also spreads risk as domestic competition in LFP intensifies.

Internationally, Lopal is building new capacity in Indonesia to support regional demand and localisation policies. The company has completed a 30,000 t/yr LFP phase there and is constructing a 90,000 t/yr second phase. It aims to finish this expansion by the end of 2025, creating a 120,000 t/yr Indonesian hub. This timing aligns with the ramp up of CATL and other Asian players across Southeast Asia.

The Lopal LFP supply deal with CATL will likely leverage both Chinese and Indonesian output over time. As a result, Lopal can optimise feedstock sourcing, shipping routes and tariff exposure. This flexibility matters as trade rules and battery content regulations evolve in the US, Europe and key emerging markets.

The Metalnomist Commentary

This deal underscores how LFP chemistry and Chinese CAM producers are locking in long term roles in global EV supply chains. By pairing fast growing Indonesian capacity with deep Chinese experience, Lopal becomes a more systemically important supplier to CATL and other majors. Market participants should watch how pricing formulas, regional sourcing splits and future offtake deals evolve, as these will shape LFP cost curves outside China.

Lopal and Cornex Sign Landmark LFP Supply Deal to Strengthen China’s Battery Chain

Lopal

Strategic Agreement Secures 150,000t of LFP Through 2029

Lopal and Cornex have signed a major lithium iron phosphate (LFP) supply deal, securing 150,000 tonnes of LFP cathode active material over five years. The Focus Keyphrase "LFP supply deal" reflects a growing trend of long-term procurement strategies across the EV battery value chain.

Under the agreement, Jiangsu Lopal will deliver LFP to three Cornex subsidiaries in Wuhan, Xiaogan, and Yichang between 2025 and 2029. The deal is valued at over 5 billion yuan ($694 million), marking one of China’s largest bilateral LFP commitments to date. This collaboration comes as LFP demand surges in both domestic and export EV markets.

Lopal Expands Production Footprint Across China and Indonesia

Lopal has rapidly scaled its LFP production capabilities following its acquisition of the LFP business from Shenzhen BTR New Energy Material. It now operates multiple LFP plants across Jiangsu, Shandong, Tianjin, Sichuan, and Hubei, giving it geographic reach and production redundancy.

In 2024, Lopal’s LFP output surged to 184,697 tonnes, a 56% increase from the previous year, with sales rising 65% to 178,287 tonnes. Lopal has also begun overseas expansion, completing the first 30,000 t/yr phase of an Indonesian plant, with a second 90,000 t/yr phase in planning. These moves position Lopal as a global LFP leader with diversified supply capabilities.

Term Contracts Signal Confidence from Global OEMs

Lopal has not only secured deals with domestic players but also signed term supply contracts with Ford and LG Energy Solution. These partnerships highlight Lopal’s growing credibility in supplying high-volume, high-quality LFP material for global EV platforms.

Meanwhile, Cornex—formally Chuneng—is increasing battery production in central China, supported by reliable LFP sourcing. The LFP supply deal ensures material stability for future gigafactory-scale battery production, a critical factor amid rising input volatility and tightening market conditions.

The Metalnomist Commentary

The LFP supply deal between Lopal and Cornex reflects the tightening integration of China’s battery supply chain, with long-term contracts emerging as a buffer against future material risk. As global automakers seek cobalt-free alternatives, LFP’s role will only grow, and producers like Lopal are positioning themselves at the center of this transition.

LMFP CAM plant expansion accelerates as Hengchuang Nami commits 130,000 t/yr in China

NAMI

Hengchuang Nami will build a 130,000 t/yr LMFP CAM plant in Yinchuan, China. The LMFP CAM plant will be built in two phases inside the Yinchuan Economic Development Zone. The first phase targets 25,000 t/yr of LMFP output. The company has committed 4.8bn yuan to the LMFP CAM plant, but it has not shared a start-up date.

Hengchuang Nami has scaled LMFP output rapidly since it formed in February 2022. The company launched a 5,000 t/yr LMFP line at the end of 2022. Meanwhile, it began large-scale LMFP production in March 2023. It expanded capacity to 15,000 t/yr by the end of 2023. The company also started building a 30,000 t/yr LMFP CAM plant in Yancheng in 2024. That Yancheng project targets production by the end of 2026.

Why LMFP demand is rising across China’s battery supply chain

LMFP cathode materials raise energy density compared with standard LFP chemistry. As a result, cell makers can improve range without moving to high-nickel designs. However, LMFP chemistry often trades cycle life and power performance versus LFP. Battery makers will likely deploy LMFP in segments that value range and cost balance. Therefore, cathode producers are racing to qualify consistent LMFP performance at scale.

Chinese producers are also expanding competing LMFP and manganese-based capacity across regions. Large LFP suppliers are building LMFP lines to protect customer relationships. Meanwhile, newer entrants are using scale to compete on cost and delivery reliability. This expansion wave will intensify price competition in the next procurement cycle.

What a 130,000 t/yr build means for inputs and market competition

A larger LMFP CAM plant will tighten coordination across manganese, phosphate, iron, and lithium inputs. Producers will need stable precursor supply and strict impurity control to meet cell specifications. As a result, buyers will likely demand tighter quality documentation and faster sampling cycles. The Yinchuan project could also strengthen inland battery materials clusters with supportive logistics and energy availability.

The broader risk is simple and immediate. New nameplate capacity can outpace real consumption if EV and storage demand slows. However, scale leaders can still win by lowering unit costs and improving consistency. Therefore, execution speed and customer qualification will decide who captures long-term contracts.

The Metalnomist Commentary

This LMFP CAM plant signals a shift from pilot volumes to industrial competition. However, the market will punish inconsistent quality and weak cost control. The strongest producers will lock inputs and deliver stable electrochemical performance.

XTC GEM CAM feedstock deal tightens China’s battery materials supply chain

XTC

XTC GEM CAM feedstock deal marks a major step in securing China’s high-end battery materials supply. Under the XTC GEM CAM feedstock deal, XTC New Energy will lock in large volumes of cobalt, nickel and lithium inputs. This XTC GEM CAM feedstock deal supports long-term cathode active material output for NCM, LCO and LFP product lines. As a result, Chinese battery makers gain greater visibility on costs and availability during a volatile raw material cycle.

Long-term CAM feedstock deal anchors XTC’s growth strategy

XTC New Energy agreed to purchase 150,000 t/yr of CAM feedstock from GEM between 2026 and 2028. The package covers cobalt chloride, nickel sulfate, cobalt tetroxide, NCM precursor and lithium salts for large-scale cathode production. This diversified basket reduces single-material risk and helps XTC balance different chemistries across consumer and power batteries. The deal also deepens an existing partnership, signalling confidence in GEM’s ability to deliver consistent quality volumes. Consequently, both companies move closer to a vertically aligned, closed-loop battery materials ecosystem.

XTC has rapidly grown sales of lithium cobalt oxide on the back of device replacement cycles and AI-enabled electronics. Government subsidies that push consumers to upgrade phones and tablets are boosting high-end cobalt-rich cathode demand. Meanwhile, combined sales of NCM and LFP cathodes also rose, reflecting broader growth across energy storage and EV platforms. By locking in feedstock now, XTC can support more aggressive volume and product planning with key OEMs.

China CAM feedstock integration deepens links with global battery OEMs

The agreement reinforces China’s position at the centre of the global CAM and precursor value chain. GEM will channel critical precursors to XTC, which already supplies ATL, Samsung SDI, Murata, LG Chem and BYD. These relationships span mid to high-end consumer devices and extend into power lithium battery producers like CALB and CATL. Therefore, the enhanced feedstock pipeline will indirectly underpin cell production for phones, tablets, EVs and stationary storage worldwide.

Tighter integration between feedstock suppliers and cathode producers can also stabilise pricing and contract structures. Long-term supply deals encourage joint planning on capacity, quality and sustainability metrics, important for global OEM qualification. At the same time, dependence on Chinese CAM feedstock raises questions for western policymakers about diversification and supply security. However, until alternative precursor hubs reach scale, China’s integrated CAM ecosystem will remain a critical anchor for lithium-ion supply chains.

The Metalnomist Commentary

This agreement shows how Chinese CAM producers and recyclers are quietly locking in the next wave of battery growth. As XTC and GEM align on volumes and chemistries, their joint leverage over cobalt, nickel and lithium flows will rise. For non-Chinese OEMs, the deal underscores the urgency of building competitive precursor and CAM capacity outside China.

China's Youshan to Build First Overseas LFP Plant in Indonesia

Youshan New Material Technology

Chinese lithium iron phosphate (LFP) producer Zhejiang Youshan New Material Technology has announced plans to build its first overseas LFP production plant in the Indonesia Pomalaa Industry Park (IPIP). The plant will have a nameplate capacity of 50,000 t/yr, with construction expected to take 16 months. Production is slated to begin in the first half of 2026, marking a significant milestone in Youshan’s global expansion strategy.

Founded in 2018, Youshan specializes in the research and development of LFP materials and operates under the ownership of Huayou Holdings Group. Huayou Holdings is also the largest shareholder of Huayou Cobalt, a major player in the production of battery metals and cathode active materials.

Huayou Cobalt's Growing Presence in Indonesia

Youshan's announcement follows Huayou Cobalt’s aggressive investments in Indonesia’s battery materials sector. The company has commissioned production facilities for mixed hydroxide precipitate (MHP), nickel matte, and lithium nickel-cobalt-manganese (NCM) precursors. In October, Huayou launched its first overseas high-nickel ternary battery precursor plant in Indonesia, highlighting the country’s critical role in global battery materials supply chains.

Other Chinese producers, such as Jiangsu Lopal Tech, have also established LFP production in Indonesia. Lopal Tech began operations at its Indonesia-based plant earlier this year, signaling a broader trend of Chinese firms leveraging Indonesia’s natural resource wealth and favorable industrial policies to expand their global footprints.

LFP Demand and Price Outlook

The global market for LFP materials is surging, driven by strong demand from the energy storage battery sector and the growing adoption of lithium-ion batteries. Exporters are also ramping up shipments to overseas markets in anticipation of higher US tariffs on battery imports starting in 2025. As demand rises, major producers are expected to increase LFP prices in the near term.

CATL Secures LFP Supply from Shenghua to Boost Battery Production

LFP

CATL Signs Strategic LFP Supply Agreement

China’s largest battery manufacturer, CATL, has entered into a major supply agreement with Jiangxi Shenghua New Material to secure long-term lithium iron phosphate (LFP) cathode materials. The deal involves a 500mn yuan ($69.6mn) advance payment to help finance Shenghua’s construction of two new LFP production facilities. These will include a 160,000 t/yr plant in Yichun, Jiangxi, and a 200,000 t/yr plant in Sichuan, significantly expanding the company’s capacity.

Priority Supply for CATL Through 2029

Under the agreement, Shenghua will prioritize all designed capacity to meet CATL’s specifications between 2025 and 2029. CATL has committed to purchasing at least 80% of Shenghua’s annual production during this period. Shenghua’s LFP output has surged from 42,159t in 2023 to 128,240t in 2024, with sales climbing at a similar pace. The company currently supplies major battery producers such as CATL, Svolt Energy Technology, and Henan Lithium Power Battery Technology.

Strengthening China’s EV and Energy Storage Market

LFP batteries accounted for nearly half of the global EV battery market in 2024, with an even greater share in China due to their cost advantages and safety profile. As geopolitical tensions and US tariffs limit export opportunities, Chinese manufacturers are intensifying efforts to stimulate domestic demand through new energy vehicle (NEV) and energy storage system (ESS) expansion. This strategic partnership positions CATL to maintain secure material supply and enhance competitiveness in both sectors.

The Metalnomist Commentary

This deal underscores the strategic importance of upstream material control in the rapidly growing EV and ESS sectors. By locking in long-term LFP supply, CATL is mitigating raw material risk while supporting China’s domestic manufacturing resilience. In a market facing geopolitical pressure, vertical integration remains a key competitive advantage.

China Vanadium Consumption Set to Rise in 2026 as VRFB Demand Accelerates

Vanadium

China vanadium consumption is expected to rise in 2026 as vanadium redox flow batteries, steelmaking, lithium iron phosphate cathode materials and denitration catalysts increase demand. The strongest growth is likely to come from VRFB-based energy storage, where projects are entering a more concentrated construction and commissioning phase.

China vanadium consumption reached 125,900t of vanadium pentoxide equivalent in 2025, up 6.1% from 2024. The market is now shifting from a steel-dominated structure toward a more diversified demand base.

China vanadium consumption still depends heavily on steel, but the share of energy storage has expanded quickly. Steel accounted for 70.9% of total demand in 2025, down from 87.9% in 2021. Energy storage rose to 20% of total use from only 4% over the same period.

This change is strategically important for vanadium producers. Demand is no longer driven only by construction steel, rebar and alloy additions. It is increasingly tied to long-duration energy storage, grid stability, batteries, catalysts and higher-value industrial applications.

VRFB Storage and Steel Demand Drive the 2026 Consumption Outlook

Vanadium demand from VRFB energy storage is expected to increase sharply in the second half of 2026. China’s National Development and Reform Commission and National Energy Administration issued a notice on 30 January to improve the generation-side capacity price mechanism, supporting longer-duration storage.

This policy direction matters because VRFB technology is better suited to long-duration applications than many short-duration battery systems. VRFBs offer long cycle life, high safety, deep-discharge capability and easier electrolyte reuse.

China’s VRFB installations in 2026 are preliminarily estimated at 4-5GWh. This forecast reflects projects already under construction and the availability of high-purity vanadium for electrolyte production.

That installation level would require around 32,000-40,000t of V2O5 equivalent. This would represent an increase of 8,000-16,000t from the previous year, making VRFBs the largest source of incremental vanadium demand.

The growth builds on rapid progress in 2025. VRFB projects with completed electrolyte filling totalled about 3,037.5MWh last year, up 1,027.3MWh from 2024. China’s cumulative VRFB installed capacity reached about 6,064.5MWh by the end of 2025, with an average duration of 4.12 hours.

The market is now moving from pilot-stage expansion to larger system deployment. As more long-duration storage projects reach construction and commissioning, vanadium electrolyte demand could become more predictable.

Steel remains the largest end-use sector. Vanadium demand from China’s steel industry is expected at 92,000-95,000t in 2026, up 3,000-6,000t from 2025.

The increase is tied to stronger demand from machinery, energy, shipbuilding, automotive and rail sectors. These ferro-vanadium end-use segments are expected to grow by around 1.2% in 2026.

The steel demand signal was already visible in the first quarter. Steel-sector vanadium consumption reached around 22,600t, up 1,800t from a year earlier.

Rebar could also provide support. Output of higher-grade steel reinforcement bar is expected to rise as infrastructure investment accelerates. Production licence rules for construction rebar took effect on 1 April, while quality traceability requirements have expanded.

These rules should raise the share of vanadium-nitrogen micro-alloyed hot-rolled rebar. That would support demand for vanadium-nitrogen alloy, especially in higher-strength construction products.

The 2025 steel data show a more complicated picture. Vanadium consumption in the steel sector reached around 89,300t, up 1,700t from 2024. However, vanadium-nitrogen alloy consumption fell by 3.8% to 36,690t because rebar’s share of vanadium use declined.

China’s rebar output fell to 186.3mn t in 2025, down 4.5% from a year earlier. This reduced vanadium demand from traditional construction steel.

Ferro-vanadium performed better. FeV50-equivalent consumption rose by 10.4% to around 39,985t, supported by stronger downstream output in several industrial sectors.

Automotive production reached 34.778mn units in 2025, up 9.8%. Civil steel shipbuilding totalled 52.295mn deadweight tonnes, up 18%. Excavator output rose by 17% to 379,643 units.

Machine tool output also increased. Metal-cutting machine tool production rose by 9.7%, while metal-forming machine tool output increased by 7.2%. These sectors helped offset weakness in rebar.

Vanadium intensity also rose. China’s vanadium use per tonne of crude steel increased to 51g of vanadium metal equivalent in 2025 from 48g in 2024. Rebar intensity edged up to 152.5g, while other steel products rose to 26.6g.

LFP cathode materials will provide another smaller but fast-growing demand source. Vanadium consumption from LFP cathodes is estimated at 2,000-2,500t in 2026, assuming a typical 0.2% V2O5 addition rate.

That would be up by 1,000-1,500t, representing growth of 100-150%. The base remains small, but the rate of increase is significant.

Denitration catalysts should also support demand. Chemical-sector vanadium consumption is expected at around 7,000t in 2026, up about 500t, or 7.7%. Demand will be supported by catalyst replacement, new coal-based thermal power projects and higher sulphuric acid output.

In 2025, chemical-sector vanadium use was around 6,500t, up 200t from 2024. Titanium-alloy-related consumption fell by around 400t, tracking weaker Chinese titanium product exports.

Supply Growth Remains Limited by Feedstock and Cost Pressure

China’s vanadium supply remains highly concentrated, but output growth is not straightforward. The country accounted for 68.8% of global vanadium capacity in 2025 and 72.4% of global production.

China’s total vanadium capacity reached 277,600t in 2025. Actual output was 163,900t, down 900t from 2024.

The production base is dominated by vanadium slag. Output from vanadium slag reached 141,300t in 2025, broadly unchanged from the previous year.

Some producers reduced supply. Xinjiang Da’an and Yunnan Yukun did not produce, cutting combined output by about 8,000t. Other producers, including Chengsteel, Desheng and Dagang, raised output by around 15%, offsetting part of the loss.

Stone-coal-based vanadium output fell more sharply. Production declined to 7,600t in 2025, down 2,600t from 2024, as lower prices left all stone-coal producers loss-making.

This route remains highly price-sensitive. At current price levels, only one large-scale stone-coal producer is operating, with output of around 100-120 t/month of ammonium metavanadate on a V2O5-equivalent basis.

A Shaanxi-based producer with capacity of 300-350 t/month has been suspended since early 2026 because of safety issues. It is unlikely to restart in the first half.

Vanadium flake prices rose to 83,000-84,000 yuan/t in March, prompting some stone-coal producers to consider restarts. However, current prices still appear insufficient to drive a large supply response.

Even when prices approached 110,000 yuan/t in 2023, stone-coal-based output only reached about 11,000t. This suggests that 2026 output growth from stone coal will likely remain limited.

Secondary resources are becoming more important. Vanadium output from spent catalysts and other secondary sources rose to 15,100t in 2025, up 1,900t from 2024.

This included about 6,700t from alumina by-product recovery, up around 1,700t. Output from spent catalysts and petroleum residues stayed broadly stable despite lower vanadium prices.

The reason is co-product economics. Vanadium is often recovered alongside molybdenum and tungsten from secondary feedstocks. Higher molybdenum and tungsten prices supported operating rates and helped keep secondary recovery viable.

Secondary output is expected to remain broadly unchanged in 2026. Feedstock availability is relatively stable, but China’s restrictions on solid-waste imports since 2017 limit the potential for major raw material growth.

Vanadium slag-based supply may edge higher in 2026, but feedstock constraints create uncertainty. Qinhuangdao Baigong completed a 10,000 t/yr V2O5 line in early 2026 and is ramping toward normal operations. Its 2026 output guidance is around 5,000t.

However, tighter domestic feedstock availability could offset this addition. Vanadium-titanium magnetite supply in the Panzhihua area is particularly constrained, potentially cutting output by about 4,500-5,000t of V2O5 equivalent.

Producers in Sichuan and Yunnan may need to source vanadium-titanium magnetite from the Chengde area or increase imports to keep output in line with 2025. A northeastern steelmaking-based vanadium producer has also reduced vanadium-titanium magnetite imports since December 2025.

This creates a cautious supply outlook. China’s vanadium output may edge higher in 2026, but the increase depends on whether new slag-based capacity can offset feedstock tightness and further weakness in stone-coal production.

The market therefore faces a potential demand-led tightening risk. VRFB demand is rising quickly, steel demand is improving modestly and smaller sectors are growing. Supply growth, meanwhile, remains constrained by feedstock, cost pressure and limited secondary resource availability.

For vanadium producers, the key opportunity lies in high-purity electrolyte-grade material. VRFB demand requires reliable vanadium quality, stable supply and long-term availability. Producers that can supply battery-grade vanadium will be better positioned than those focused only on metallurgical demand.

For steel users, the issue is price exposure. If VRFB demand absorbs more vanadium units, ferro-vanadium and vanadium-nitrogen alloy buyers could face stronger competition from the energy storage sector.

For energy storage developers, the issue is raw material security. VRFB growth depends on enough high-purity vanadium to support electrolyte production. Supply constraints could affect project economics if demand accelerates faster than conversion capacity.

The Metalnomist Commentary

China’s vanadium market is entering a new phase where steel remains the base, but VRFBs set the growth direction. The strategic tension in 2026 will be whether constrained supply can keep pace with energy storage demand without pricing steel users out of the market.

Zhengkunyuan LMFP cathode plant signals China’s next battery push

LMFP

Zhengkunyuan LMFP cathode plant plans mark a new EV materials expansion. The Zhengkunyuan LMFP cathode plant in Changzhi targets 20,000 t/yr of LMFP. As a result, the Zhengkunyuan LMFP cathode plant could extend EV range at lower cost.

Capacity, investment, and location

Zhengkunyuan will build the LMFP facility in Changzhi’s Zhangze industrial park. The total investment is 300mn yuan. The company will execute construction in two phases to manage ramp risk. However, it disclosed no timeline or start date. A cooperation agreement with the local high-tech zone supports approvals. Meanwhile, Phase 1 has already run elsewhere since 2023.

LMFP’s edge and market outlook

LMFP offers higher energy density than LFP at competitive cost. Therefore, it enables longer driving ranges for mass-market EVs. Trade-offs include shorter cycle life versus LFP in many use cases. Producers must optimize coatings and particle morphology.

China’s LMFP ecosystem is scaling fast across several hubs. Hunan Yuneng, Shanxanxi Tewashi, Ronbay, and others are adding capacity. This clustered build-out strengthens domestic cathode resilience. It also diversifies supply for energy storage and NEV demand.

The Metalnomist Commentary

LMFP is moving from pilot to scale in China. Watch near-term offtakes and durability claims. Cost-per-kWh and cycle life will decide winners.

Nickel surplus to widen through 2026: INSG outlook for miners and metals markets

INSG(

The nickel surplus to widen through 2026 is reshaping expectations for miners, traders and stainless producers worldwide. According to the latest INSG forecast, the nickel surplus to widen through 2026 will see production consistently outpace usage, even as global economic activity proves more resilient than expected. As a result, the nickel surplus to widen through 2026 is set to reach 209,000t in 2025 and 261,000t in 2026, with primary output rising to 3.81mn t this year and 4.09mn t in 2026 against usage of 3.6mn t and 3.82mn t.

Stainless demand supports nickel, but batteries lose momentum

Nickel demand remains supported by stainless steel, but battery growth has clearly cooled. Higher stainless steel output continues to underpin core nickel usage, particularly in Asia and Europe. However, battery demand has slowed as automakers and cell producers shift towards non-nickel chemistries such as LFP and accelerate plug-in hybrids over pure battery electric vehicles. Therefore, the high-growth battery narrative has softened, easing pressure on high-purity nickel sulphate demand.

Meanwhile, this demand shift is forcing producers and investors to reassess project pipelines focused on battery-grade nickel. Margins are under strain where costs are high and product mixes are heavily exposed to the EV segment. In this environment, stainless steel remains the anchor sector, but it cannot fully absorb the excess tonnes entering the system. This imbalance feeds directly into the widening surplus and keeps a lid on any sustained price rally.

Indonesia drives supply growth as others retrench

On the supply side, Indonesia remains the dominant driver despite tighter regulatory control. The government has delayed permit approvals, seized non-compliant land and punished firms that fail reclamation duties. However, the INSG believes these interventions have only created temporary disruptions, with overall Indonesian nickel output still expected to increase through 2026. This continued expansion reinforces the structural surplus and raises competitive pressure on higher-cost regions.

Outside Indonesia, weaker profitability has already forced several producers to scale back or suspend operations. In China, the shift from nickel pig iron towards more refined cathode output is forecast to continue as the industry optimises for flexibility and value. Nickel sulphate production is expected to ease in 2025 as battery demand softens, before recovering in 2026 when market conditions stabilise. For now, prices remain trapped between steady stainless demand and a widely recognised surplus in exchange-traded Class 1 inventories, with three-month nickel recently trading near $15,480/t.

Financial conditions are improving, with global inflation forecast to decline across most G20 economies by 2026. Even so, the INSG warns that tariffs and trade measures could offset some macro tailwinds by adding friction to investment decisions, supply chains and downstream demand growth. If policy risk rises, it may delay project sanctions and accelerate closures at the margin, but the current surplus path remains firmly in place.

The Metalnomist Commentary

The INSG nickel surplus outlook underscores a market where supply discipline lags structural investment made during the last bull cycle. For producers, cost reduction, product differentiation and downstream partnerships will be critical to survive a prolonged surplus. For consumers in stainless and batteries, the coming years offer a rare window to secure long-term nickel units on favourable terms before the next demand wave arrives.

Weak NCM Demand Restrains Nickel Consumption Growth in China

Lygend

China’s nickel consumption growth has been constrained this year, primarily due to weak demand in the nickel-cobalt-manganese (NCM) cathode active material (CAM) sector and the increasing market dominance of lithium-iron-phosphate (LFP) CAM.

NEV Battery Market Trends

Despite a 37% year-on-year increase in China’s new energy vehicle (NEV) battery production from January to September, NCM battery growth lagged at 19.2%, while LFP surged by 45.6%, according to the China Innovative Alliance of Automotive Battery Industry.

• NCM precursor output grew by 4%.
• NCM CAM production rose by 10%, highlighting a slower growth trend compared to downstream NEV battery production.
• Nickel sulphate output is projected to decline by 1%, even though total supply is expected to rise by 6% due to increased imports.

The discrepancy in growth rates between upstream, midstream, and downstream sectors is expected to stabilize next year as inventories decline and buying interest increases.

Rising Imports of MHP and Matte

China’s imports of mixed hydroxide precipitate (MHP) and matte, key feedstocks for nickel sulphate and class I nickel production, have risen sharply:

• MHP Imports: Up 17% to 1.07 million tons during January-September, with Indonesia accounting for 57% growth due to increased capacity from Chinese companies such as Lygend’s ONC, GEM’s QMB project, and Huayou’s Huafei facility.
• Matte Imports: Increased by 61% to 341,494 tons, driven by the ramp-up in new capacities.

Transition in Nickel Matte Production

A significant portion of the matte imports consists of low-grade matte (20% nickel content), which is further refined into high-grade matte (70% nickel content) in China for nickel sulphate or cathode production. However, some matte producers have shifted focus to producing nickel pig iron (NPI) due to its higher profit margins.

Nickel Metal Output Outlook

While nickel sulphate production is forecast to dip, China’s overall nickel metal output is expected to surge by 34%, reaching 320,000 tons in 2024. This increase underscores the country’s reliance on imported feedstocks and growing domestic capacity to meet demand.

Future Prospects

As inventories dwindle and buying interest rebounds, 2024 is likely to see a narrowing of growth disparities across the supply chain. However, China’s nickel market remains under pressure from fluctuating demand patterns, shifts in feedstock sourcing, and competition between NCM and LFP technologies.

Chinese Cobalt Prices Expected to Decline Further in 2025 Amid Rising Supply and Weak Demand

Chinese Cobalt Manufacturing

Oversupply and Weak Demand to Push Cobalt Prices Lower

The Chinese cobalt market is set to experience further price declines in 2025, as increasing nickel and copper production, from which cobalt is a by-product, leads to an oversupply that buyers are struggling to absorb.

Currently, Chinese-origin cobalt metal traded in Europe has already seen significant pressure due to a lack of floor pricing on raw materials, a trend expected to persist into the new year. Market insiders suggest that cobalt prices could drop below $9/lb, as fully integrated Chinese producers view cobalt as a credit to their primary metal production, particularly nickel and copper.

For these refiners, cobalt is a secondary concern. As one trading firm explained, some Chinese producers operate with production costs as low as $4,000 per ton while selling at $9,000 per ton. Even if they incur a $50 million loss on cobalt, they may still profit significantly from copper production, which can generate up to $700 million in gains.

Chinese Refiners Likely to Continue Production at a Loss

Unlike non-Chinese refiners, which may curtail supply if cobalt prices fall below $9/lb, some Chinese integrated mining firms and refiners could continue refining hydroxide into metal at a loss-making $7-8/lb.

While there is speculation that some Chinese metal producers may attempt to negotiate floor prices in their contracts, it remains uncertain whether these efforts will succeed. Market participants are closely watching how these negotiations unfold, as they could provide some level of price support if successful.

Global Nickel and Copper Growth to Sustain Cobalt Oversupply

The primary factor driving cobalt’s oversupply is the continued expansion of nickel and copper production, as cobalt is a by-product of both metals.

• Nickel production is set to rise again in 2025 with the launch of new Class 1 nickel refineries in China and Indonesia. This will likely keep London Metal Exchange (LME) three-month official nickel prices within the $15,000-17,000 per ton range, significantly lower than the $30,000 per ton peak in early 2023.

• Copper production is also projected to increase due to expansions at mines such as Kamoa-Kakula in the Democratic Republic of Congo (DRC). Although cobalt sales represent only a minor portion of copper mining revenues, producers still aim to extract value from it as a credit.

Weakened Demand from EV and Chemicals Sectors Further Pressures Prices

While cobalt demand in China has surged by 40%, this has not been enough to counteract weakening demand in other regions, particularly in Europe:

• The electric vehicle (EV) sector in Europe has slowed down, leading to reduced demand for cathode active materials like cobalt.

• The European chemicals industry, particularly in Germany, has struggled due to rising energy costs and broader economic challenges.

Even if prices do increase, China has ample spare refining capacity and could use third-party tolling arrangements to process hydroxide into metal, further maintaining downward price pressure.

Peak Oversupply May Be Near, But Price Recovery Remains Uncertain

Some market participants believe that cobalt hydroxide oversupply may have already peaked. The shift towards lithium iron phosphate (LFP) batteries, which do not use cobalt, has significantly impacted the demand for nickel-cobalt-manganese (NCM) battery chemistries, leading to lower demand for cobalt sulfate and cobalt hydroxide.

However, despite this potential supply peak, weak demand across key industrial sectors suggests that cobalt prices are unlikely to see a strong recovery in the near term.

Conclusion

In 2025, Chinese cobalt prices are expected to remain under pressure due to rising nickel and copper production, ongoing oversupply, and weak demand from the European EV and chemicals sectors. While some believe that the cobalt market may be nearing peak oversupply, prices are unlikely to experience significant upward momentum unless demand rebounds sharply or supply reductions occur.

Galan Secures Lithium Offtake Deal to Supply US Partner

Galan Lithium

Authium Signs Long-Term Agreement for Lithium Chloride from Argentina

Galan Lithium has signed a binding lithium offtake agreement with US-based Authium to support the development of Galan’s Hombre Muerto West (HMW) lithium brine project in Argentina. The agreement covers the purchase of 45,000 metric tonnes of lithium carbonate equivalent (LCE) in lithium chloride form over six to twelve years. This move positions Galan to become a key supplier to US battery material processors.

Authium will provide a $6 million offtake prepayment, ensuring supply security for its lithium carbonate plant in the United States. Meanwhile, Galan’s HMW project will ramp up in phases to achieve a production capacity of 60,000t/yr of LCE, reinforcing Argentina’s role in global lithium supply chains.

Galan Targets LFP Battery Market with Lithium Chloride Strategy

Galan produces lithium chloride concentrate, aligning with rising demand from lithium converters. As lithium iron phosphate (LFP) battery technology gains adoption, chloride-based feedstock is increasingly favored for conversion flexibility and cost. Therefore, Galan's chloride strategy supports downstream decarbonization and expands optionality for global cathode manufacturers.

The Metalnomist Commentary

This agreement reflects the growing vertical integration between upstream brine producers and downstream processors in the US. Galan’s strategic shift toward chloride aligns well with LFP market trends, highlighting Argentina’s expanding role in lithium geopolitics.

Shidai Ruixiang Launches LMFP Battery Material Plant in Gansu

Baiyin Nonferrous Group

China’s Shidai Ruixiang has launched a new LMFP battery material plant with a production capacity of 20,000 tonnes per year. Located in Baiyin city, Gansu province, this marks the first phase of what will become the world’s largest LMFP facility. Once complete, the site will scale to 100,000 t/yr in lithium ferro-manganese phosphate production for next-generation EV battery applications.

The LMFP battery material plant is operated by Shidai Ruixiang, a joint venture between Gansu Elephent Energy and Baiyin Nonferrous Group, a major Chinese state-owned metals producer. The full project will be developed in three phases, although details for the next stages remain undisclosed. This launch reinforces China’s dominant position in advanced battery cathode material (CAM) supply chains.

China Expands LMFP Footprint in Global EV Market

LMFP materials offer higher energy density and longer driving range than traditional LFP cathodes, while keeping manufacturing costs low. However, they have shorter life cycles and reduced charge-discharge capacity, making them more suitable for mid-range EVs or power tools. Despite this, China’s battery sector is accelerating investment in LMFP research and production.

Other major CAM players such as Hunan Yuneng and Ningbo Ronbay are also expanding LMFP production. Ronbay announced a dual LMFP and sodium-ion CAM plant in Xiantao, Hubei, while Yuneng is constructing a dedicated LMFP facility. These efforts position LMFP as a potential mainstream solution for future battery platforms balancing cost, safety, and range.

Strategic Role of State-Backed Metals Companies in CAM Expansion

The Shidai Ruixiang LMFP battery material plant highlights growing integration between state-backed metals enterprises and energy storage innovation. Baiyin Nonferrous brings decades of expertise in copper and zinc processing—critical metals for battery infrastructure—into the cathode materials space. The partnership reflects China's strategy to leverage existing industrial assets for clean tech scalability.

As battery chemistries diversify in response to cost and performance demands, China’s control over both upstream raw materials and downstream manufacturing provides a distinct competitive edge in the global energy transition economy.

The Metalnomist Commentary

The LMFP battery material plant in Gansu represents a strategic shift toward diversified CAM solutions for scalable EV deployment. As Chinese producers push LMFP into the mainstream, global automakers and battery buyers will need to weigh performance trade-offs against cost and availability.

Hubei Boyang launches manganese-based battery CAM plant to scale China’s next-wave cathodes

Hubei Boyang

China’s manganese-based battery CAM build-out gained momentum as Hubei Boyang started its first-phase plant. The project adds manganese-based battery CAM capacity and manganese tetroxide at scale. As a result, manganese-based battery CAM supply will deepen near upstream ore in Hubei.

First-phase start-up and three-stage growth path

Hubei Boyang commissioned a plant with 20,000 t/yr of manganese-based CAM. It also started 30,000 t/yr of manganese tetroxide. The site sits in Changyang, Yichang, central Hubei. However, the plan is larger than this first step. The full project targets 280,000 t/yr across three phases.

Changyang county hosts abundant manganese ore reserves for feedstock. Therefore, the location reduces logistics risk and costs. Hubei Zhongmeng operates five lines totaling 50,000 t/yr of manganese flake. That nearby supply strengthens the project’s raw material security.

China’s LMFP and Mn-rich cathodes expand rapidly

China’s power battery growth is catalyzing manganese-based battery CAM investments. Producers are scaling LMFP and related Mn chemistries. Meanwhile, Hunan Yuneng is building an LMFP line. Shanxanxi Tewashi began a 100,000 t/yr plant in May. Ningbo Ronbay plans LMFP and sodium-ion CAM in Hubei. Baiyin Shidai Ruixiang launched 20,000 t/yr of battery-grade LMFP in Gansu.

Manganese-rich cathodes aim to balance cost, safety, and energy. As a result, they target EVs and storage systems. Hubei Boyang’s start-up signals tighter integration from ore to cathode. It should broaden customer options beyond LFP and ternary NCM.

The Metalnomist Commentary

China’s Mn-based push lowers cathode cost while reducing nickel and cobalt exposure. Watch phase-by-phase execution and LMFP adoption rates. Regional feedstock proximity could anchor margins during price swings.

China's XTC Reports Strong CAM Sales Growth in First Half of 2024

XTC New Energy Materials

Chinese lithium-ion battery cathode active material (CAM) manufacturer XTC New Energy Materials (Xiamen) reported a significant increase in sales for the first half of 2024. The firm’s growth was driven by rising demand from downstream industries, reflecting the broader surge in demand for electric vehicle batteries and energy storage solutions.

Impressive Sales Growth

XTC New Energy's sales of CAM, including lithium cobalt oxide (LCO) and lithium nickel-cobalt-manganese oxide (NCM), soared by 67% year-on-year, reaching 44,740 tonnes from January to June. The sales included 18,401 tonnes of LCO, up 30%, and 26,338 tonnes of NCM, a remarkable 109% increase. The surge in NCM sales reflects the growing demand for high-performance battery materials in the global market.

Expanding Production and International Presence

XTC New Energy, once a division of Xiamen Tungsten (XTC), has been operating independently since 2016, focusing on the research, development, production, and sale of CAM for lithium-ion batteries. The company is actively expanding its production capacity. In September 2023, XTC unveiled plans to build a 40,000 t/yr NCM plant in France in partnership with France-based Orano CAM, aiming to strengthen its international presence.

In addition, XTC New Energy is building a new factory in Ya’an, Sichuan province, to produce lithium iron phosphate (LFP), with a planned annual capacity of 100,000 tonnes. The first phase of the plant, with a capacity of 20,000 tonnes, began trial production earlier this year.

XTC New Energy has established partnerships with leading global and domestic battery manufacturers, including ATL, Samsung SDI, Murata, LGC, Sunwoda, Zhuhai Guanyu, and BYD. The company’s CAM products are widely used in middle- and high-end electronics and power lithium batteries. XTC also collaborates with power battery producers such as CALB, Panasonic, BYD, CATL, Sunwoda Electronic, and Gotion High-tech, further solidifying its role in the global battery supply chain.

China's Lithium Tech Export Curbs Threaten EU Battery Industry

China's Lithium Battery

Key Technology Export Controls Put European Battery Industry on Edge

China's proposed restrictions on exporting key lithium processing technologies are sending shockwaves through the European Union's (EU) burgeoning battery industry. The proposed curbs target crucial equipment used in lithium extraction and battery material production, including lithium-iron-phosphate (LFP) battery production equipment, cathode preparation technology, and direct-lithium-extraction (DLE) technology, particularly from spodumene and brines. A consultation period is open until February 1st, after which a final decision will be made.

Europe's Reliance on Chinese Technology Raises Concerns About Supply Chain Security

Industry experts warn the impact could be significant, especially for junior European lithium producers heavily reliant on Chinese technology. Companies like Northvolt, which recently announced job cuts and scaled back ambitions, highlight the vulnerability of the EU's current strategy. The restrictions could hinder the development of a robust, independent European battery supply chain.

Companies with In-House Technology See Opportunity Amidst Crisis

However, some companies are better positioned to weather the storm. Vulcan Energy Resources, an Australian company with operations in Europe, claims to have developed in-house absorption-type DLE technology, securing its supply chain and potentially offering solutions to other European players. Vulcan Energy Resources' executive chair, Francis Wedin, emphasized the strategic advantage of their technology, particularly given Goldman Sachs's preference for brine-based lithium extraction due to lower production costs.

European Lithium Market Faces Uncertainty and Calls for Action

Other voices in the European lithium market paint a more concerning picture. Viridian Lithium's chief commercial officer, Luc Pez, warned of potentially "extremely disruptive" consequences for the nascent ex-China battery supply chain. Pez criticized the lack of preparedness in Europe and the US, urging for accelerated reshoring of the battery supply chain and addressing regulatory inconsistencies within the EU. He highlighted the urgent need for Europe to establish concrete plans and achieve its targets in the face of increasing competition from China in the electric vehicle market.

The Future of European Electric Vehicle Market Hangs in the Balance

China's proposed export restrictions underscore the geopolitical complexities of the lithium market and the challenges facing Europe's ambitions in the electric vehicle sector. The move could significantly impact the development of the European electric vehicle market, as the EU aims to reduce its reliance on China for battery supply.