Tesla Launches Shanghai Megapack Energy Storage Battery Factory

Tesla

In an exciting move towards sustainability and the acceleration of global energy transition, Tesla has officially launched its Megapack energy storage battery gigafactory in Shanghai. This new facility is a significant step in Tesla’s efforts to expand its energy storage systems globally, marking its first production unit for energy storage outside the United States.

Gigafactory’s Vision and Production Capacity

The factory is located in the Lin-gang Special Area of China’s Shanghai Pilot Free Trade Zone, with a planned production capacity of 10,000 Megapack units per year. This capacity equates to 40 GWh of energy storage. Tesla produced its first Megapack unit in February 2024, and production is expected to ramp up in the first quarter of the year. The company’s expansion of Megapack manufacturing is crucial in meeting the growing demand for energy storage systems as part of global efforts to transition to renewable energy sources.

Innovative Megapack Technology and Tesla’s Global Impact

The Megapack, which was first launched in 2019, can store up to 3,900 kWh of electricity per unit. This capacity is equivalent to the energy storage needs of 62 Model 3 electric vehicles (EVs). Designed to serve as large-scale energy storage solutions, the Megapack is ideal for battery storage power stations and can help stabilize grids reliant on renewable energy sources. Tesla’s goal is not just to create electric vehicles but to be a key player in the global energy transition, producing innovative energy storage technologies that support renewable power generation.

Tesla’s Expansion in Global Energy Storage Systems

This Shanghai-based gigafactory is Tesla's first energy storage manufacturing facility outside of the United States. Tesla’s California factory, which started production earlier, has a capacity of 40 GWh per year, producing around 200 Megapack units weekly. With the Shanghai factory now operational, Tesla aims to scale its energy storage solutions globally, facilitating the transition to sustainable energy worldwide. The company also reported a significant 113% increase in energy storage capacity in 2024, reaching 31.4 million kWh, surpassing the total capacity of the past three years combined.

Tesla’s ambition is clear. As the company looks to meet the increasing demand for energy storage solutions, it highlights the potential for Megapacks to play a critical role in energy generation and storage. As Tesla notes, just 0.1% of China’s Taklimakan Desert could power the entire nation for a year with the energy stored in these systems.

Conclusion: A Global Energy Shift on the Horizon

Tesla’s commitment to scaling energy storage production marks a pivotal moment in the push towards renewable energy. With the Shanghai gigafactory now in full production, the company is well-positioned to meet the rising global demand for energy storage batteries. As shipments of energy storage systems continue to grow, Tesla's innovations promise to be a crucial component in the energy transition, helping to reduce reliance on fossil fuels and ensuring a more sustainable future.

Shanghai Extends Free License Plates for EVs Through 2025 to Boost NEV Adoption

Shanghai EV, Free License

Policy extension aligns with China’s broader push for greener, smarter vehicle consumption

Shanghai has extended its free license plate policy for new energy vehicles (NEVs) until the end of 2025. The move supports national efforts to replace older internal combustion engine (ICE) vehicles with cleaner alternatives and ease urban emissions.

The city continues to exempt NEV buyers from license plate auction fees, which remain mandatory for conventional vehicles. With over 5 million vehicles on its roads, Shanghai aims to encourage faster turnover of aging cars while reducing emissions and congestion in line with national climate goals.

Beijing and other top-tier cities ramp up NEV incentives

China’s central government confirmed in January 2025 that it would continue subsidies for both NEVs and ICE vehicles. These incentives aim to stimulate domestic demand and replace older, less efficient vehicles.

On 24 January, the Ministry of Commerce released a plan encouraging local governments to ease vehicle purchase restrictions through 2027. Major cities including Beijing, Guangzhou, and Shenzhen are adjusting quotas to prioritize NEV adoption. Beijing, for example, will raise its NEV purchase quota in 2025.

These changes form part of a broader strategy to optimize vehicle ownership systems in high-density cities where congestion is a persistent challenge.

NEV market continues to grow nationwide

As of the end of 2024, China had 31.4 million NEVs, comprising battery electric vehicles (BEVs), plug-in hybrids, and fuel cell vehicles. BEVs account for 22.09 million of that total, according to government data.

This figure represents 8.9% of China’s entire automobile population and reflects the country’s accelerating transition toward low-emission transport. Continued policy support from cities like Shanghai will likely further boost NEV sales and domestic battery demand in 2025.

Tesla Builds First Grid-Scale Battery Storage Plant in China

Tesla Battery Storage

Tesla Expands Megapack Deployment with China Project

Tesla has announced plans to build its first grid-scale battery storage plant in China, leveraging its advanced Megapack battery system. The project, worth 4bn yuan ($560mn), is a partnership with China Kangfu International Leasing and Shanghai's local government. Once operational, the facility will become China’s largest grid-scale battery storage station.

Tesla began producing Megapacks at its Shanghai gigafactory earlier this year. With an annual capacity of 10,000 units — equal to 40GWh — the plant can support large-scale energy storage demand. Each Megapack stores 3.9MWh, enough to power 3,600 homes for one hour.

Growing Role of China in Tesla’s Energy Strategy

Tesla shipped more than 100 Megapacks from Shanghai in the first quarter, primarily to Europe and Oceania. The Shanghai factory complements its 40 GWh/yr facility in California, reinforcing Tesla’s dual-continent approach to scaling energy storage.

Global demand for energy storage continues to rise, driven by renewable integration and declining costs. According to Chinese research institute EV Tank, shipments of storage batteries are projected to climb to 1,550GWh by 2030. This positions Tesla to capitalize on exponential growth in both the Chinese and international markets.

The Metalnomist Commentary

Tesla’s move to build a grid-scale battery storage plant in China highlights its strategy to dominate global energy storage. By localizing production and deployment, Tesla strengthens its foothold in the world’s largest energy transition market. However, its reliance on China also exposes it to potential policy and geopolitical risks.

Toyota Expands EV Operations in China and the US with New Facilities

Toyota

Toyota, a leading Japanese manufacturer, is setting up a new electric vehicle (EV)

production facility in Shanghai, China. The company aims to strengthen its presence in the growing Chinese EV market by delivering electric vehicles (EVs) and EV batteries to local customers. At the same time, it will begin shipping EV batteries from its newly established North Carolina facility in the United States. These moves are part of Toyota’s broader strategy to boost global EV production, aligning with its goal to sell 1.5 million EVs by 2026.

New Shanghai Facility: Focusing on EVs and Batteries

The new plant in Shanghai will focus on the production of EV batteries as well as the new Lexus brand EVs. Toyota plans to manufacture 100,000 EV units after 2027, though it has not disclosed whether this production will include batteries for models other than the Lexus EVs. Interestingly, Toyota has decided to set up the new Shanghai firm as a wholly-owned subsidiary, a rare move for foreign automobile manufacturers, who typically partner with local companies in China. This suggests that Toyota is committed to delivering new energy vehicles (NEVs) to Chinese customers rapidly, with a strong focus on the domestic market.

North Carolina Facility: EV Battery Production Ramp-Up

Toyota is also investing heavily in its North Carolina facility, which will start delivering EV batteries from April. This facility, with an investment of approximately $14 billion, will feature 10 production lines for batteries catering to EVs and plug-in hybrid electric vehicles (PHEVs), alongside four production lines dedicated to hybrid vehicle batteries. While Toyota has not disclosed the specific production volume for its North Carolina plant, this significant investment underscores its commitment to becoming a major player in the global EV market.

Toyota's EV Sales Strategy and Challenges

Despite these expansions, Toyota's global EV sales remain sluggish, with the company revising its sales forecast downward for the 2024-25 fiscal year. The revised outlook predicts sales of 142,000 EVs and 154,000 PHEVs, which represents a decrease of 11% and 4.9%, respectively, compared to the previous forecast. Toyota’s decision to adjust its expectations for EV and PHEV sales marks two consecutive downward revisions, highlighting the challenges the company faces in meeting its EV targets. Nonetheless, the investments in China and the US represent critical steps in Toyota's ongoing efforts to accelerate its EV production and meet its 1.5 million EV sales goal by 2026.

SHFE Indonesian Nickel Cathode Brands Strengthen Indonesia’s Class I Nickel Role

The Shanghai Futures Exchange

SHFE Indonesian nickel cathode brands have gained a major credibility boost after the Shanghai Futures Exchange approved two Indonesian-produced nickel cathode brands for delivery against SHFE contracts. The approvals cover PTENICO from Eternal Nickel Industry and DX zwdx from CNGR Dingxing New Energy.

The approvals mark an important step in Indonesia’s move from nickel ore and intermediate products toward exchange-deliverable Class I nickel. Indonesia has already become the world’s dominant nickel processing hub, but exchange approval gives its refined metal greater financial-market recognition.

SHFE Indonesian nickel cathode brands also reinforce the role of Chinese-backed industrial parks in building Indonesia’s downstream nickel value chain. Both approved producers are linked to major Chinese groups with strong positions in stainless steel or battery materials.

The development matters because exchange-deliverable nickel sits at the intersection of physical supply, futures market liquidity and industrial procurement. Approval by SHFE gives the brands wider acceptance among Chinese market participants and strengthens Indonesia’s role in Class I nickel trade.

Tsingshan and CNGR Extend Indonesia’s Refined Nickel Platform

Eternal Nickel Industry’s PTENICO brand was approved by SHFE after previously being listed on the London Metal Exchange on 16 December 2025. The company is a subsidiary of Chinese stainless steel producer Tsingshan Holding Group.

The plant is located in the Weda Bay Industrial Park in Halmahera, North Maluku. It uses an electrolytic process and has 50,000 t/yr of nickel cathode capacity, with nickel content of 99.96%.

Tsingshan’s involvement is strategically important. The group transformed global nickel markets through Indonesian nickel pig iron and stainless steel expansion, and it is now extending that influence into refined Class I nickel.

CNGR Dingxing New Energy’s DX zwdx brand was also approved by SHFE. The plant is located at the Indonesia Morowali Industrial Park and also uses an electrolytic process. It has 50,000 t/yr of nickel cathode capacity, with nickel content of 99.96%.

CNGR Dingxing is a subsidiary of CNGR, a major Chinese lithium-ion battery cathode active material precursor producer. This gives the brand a direct connection to battery materials supply chains, not only stainless steel demand.

The LME accepted CNGR Dingxing’s Indonesian nickel cathode brand in May 2024. It also approved cobalt cathode produced by CNGR in Qinzhou, Guangxi, in March, showing the company’s expanding exchange-approved metals footprint.

Together, PTENICO and DX zwdx represent 100,000 t/yr of Indonesian nickel cathode capacity. Their SHFE approval gives Indonesia a stronger position in futures-linked refined nickel supply.

Exchange Approval Changes Nickel Market Positioning

The two brands are the first Indonesian-produced nickel cathodes approved by SHFE for delivery. That is significant because Indonesia’s nickel rise was initially built around ore, nickel pig iron, ferronickel, matte and mixed hydroxide precipitate.

Exchange-deliverable cathode is a different market category. It requires tighter quality control, brand recognition and acceptance by financial and physical market users.

SHFE has approved Chinese-produced nickel cathode brands totalling 121,000 t since 2024. Adding Indonesian brands expands the pool of deliverable material and shows how Indonesia is being integrated into China’s nickel pricing and delivery system.

This could gradually influence nickel market structure. More deliverable Indonesian metal may improve flexibility for Chinese buyers, increase acceptable supply for futures settlement and strengthen the link between Indonesian production and Chinese exchange pricing.

The approvals also come during a period of Class I nickel oversupply. LME and SHFE inventories have risen as new refined nickel capacity has entered the market faster than demand growth from batteries and alloys.

Against that backdrop, brand approval can become a competitive advantage. Producers with exchange-deliverable status may have better access to financing, trade channels and customers that require recognised specifications.

For Indonesia, the approval supports a broader industrial policy objective. The country wants to capture more value from its nickel resources by moving beyond raw ore and intermediate exports into higher-value metal and battery materials.

For China, the approvals deepen supply-chain integration with Indonesian assets. Chinese companies are not only investing in Indonesian mines and smelters; they are building exchange-recognised refined metal capacity that can serve Chinese industrial and financial markets.

The Metalnomist Commentary

SHFE approval of Indonesian nickel cathode brands confirms that Indonesia is moving deeper into Class I nickel, not only bulk stainless and battery intermediates. The strategic issue now is whether this new exchange-deliverable capacity strengthens market liquidity or adds further pressure to an already oversupplied refined nickel market.

China’s Steel Market Faces Persistent Challenges Despite Stimulus Measures

China’s Steel

Chinese steel prices experienced a modest rebound from multi-year lows in late September, spurred by a series of government stimulus policies. However, the steel market's long-term outlook remains uncertain due to sluggish domestic demand, weakening real estate investments, and global trade barriers.

Steel Prices Rebound, but Demand Stays Weak

Steel prices in China bottomed out in late September, with the People’s Bank of China reducing the reserve requirement ratio (RRR) by 0.5% and lowering mortgage rates. Despite these measures, real estate investments for January-September declined by 10.1% year-on-year, according to the National Bureau of Statistics (NBS). The area of new construction projects dropped by 22.2% over the same period, underscoring a lack of recovery in demand.

Domestic steel demand remains heavily tied to new construction and infrastructure projects. However, China’s shift in focus toward existing housing rather than new builds has limited the effectiveness of stimulus policies.

Steel Production Increases Amidst Price Rebound

Chinese steel mills responded to the price recovery by ramping up production. Profits rebounded from losses of Yn150-200 per ton in early September to Yn200-250 per ton by early October. Weekly rebar output reached 2.4 million tons in mid-October, the highest since late June. Blast furnace and electric arc furnace operation rates also hit two-month highs during this period.

Despite increased production, market participants anticipate a dip in construction steel demand from mid-November as northern cities enter the winter heating season.

Steel Exports: A Mixed Bag

Chinese steel exports surged by 21.2% year-on-year in January-September, totaling 80.71 million tons. However, this growth is under threat from rising anti-dumping measures in countries such as Turkey, India, Vietnam, and South Korea. With major overseas markets slowing operations during the Christmas season, export bookings are expected to taper off in December.

Stimulus Measures: Limited Impact on Real Estate

China’s Ministry of Finance (MOF) has announced significant fiscal measures, including a Yn1 trillion issuance of ultra-long special treasury bonds and an increased financial expenditure of Yn180 billion for 2024. Additionally, the Ministry of Housing and Urban-Rural Development (MHURD) plans to rebuild 1 million apartments in shanty towns and dilapidated areas. However, these measures are relatively mild compared to the peak of 6 million units rebuilt annually from 2016 to 2018.

To further stimulate the housing market, most cities, except Beijing, Shanghai, and Shenzhen, have lifted purchase restrictions. Despite these efforts, the market remains constrained by long-term structural issues.

Market Outlook: Cautious Optimism

Shanghai hot-rolled coil (HRC) prices declined by Yn230 per ton (6.3%) from 7 October to Yn3,420 per ton as of yesterday. Market analysts suggest that while steel prices may not return to their September lows, downward pressure is likely in November and December.

As China continues to navigate economic headwinds, the steel sector’s recovery appears contingent on significant new investments and sustained domestic demand growth. The global context of anti-dumping measures and trade barriers adds another layer of complexity, potentially capping export growth prospects in the near term.

China's Putailai Cancels Sweden Battery Anode Project Amid Regulatory Hurdles

Shanghai Putailai

Chinese battery anode material manufacturer Shanghai Putailai has announced the termination of its planned battery anode material project in Sundsvall, Sweden, after failing to secure approval from the Swedish government. The decision, disclosed on December 19, follows extensive regulatory reviews and negotiations regarding investment conditions.

The project, initially designed to have a production capacity of 100,000 tonnes per year (t/yr), was expected to roll out in two phases: 50,000 t/yr by 2025, followed by another 50,000 t/yr by late 2026 or early 2027. Putailai had earmarked a maximum investment of 15.7 billion Swedish kronor ($1.4 billion) for the venture, which was part of its broader strategy to expand outside of China.

Regulatory Hurdles and Project Termination

Putailai’s foreign direct investment (FDI) declaration was submitted to Sweden’s Strategic Products Supervision Bureau in February 2024, with an official review beginning in June 2024. However, on December 3, the Swedish government imposed conditions regarding equity control, management composition, intellectual property rights, and corporate supervision for Putailai’s Swedish subsidiary, Zichen Sweden.

After failing to reach an agreement on these terms, Sweden ultimately rejected Putailai’s investment application, though specific reasons were not disclosed. The company had already invested 14 million yuan ($1.9 million) in a feasibility study, though it noted that this cost would not impact its operations.

Expanding Anode Production in China Amid Western Setbacks

Despite the setback in Sweden, Putailai remains committed to increasing its anode material production capacity. The company reported 68,197 tonnes of anode material sales in H1 2024, marking a 24% year-on-year increase. It currently operates 150,000 t/yr of total capacity and is constructing an additional 100,000 t/yr plant in Qionglai, Sichuan province, set to launch by the end of December.

Several Chinese battery material firms, including Shanshan, have sought expansion into Europe, with Shanshan planning a 100,000 t/yr anode production complex in Finland to cater to overseas demand. However, geopolitical uncertainties and economic challenges have created obstacles for Chinese firms seeking foreign investments and partnerships.

China's Jiayuan to Secure Copper Cathode Supply from Swiss Firm IXM for Lithium-Ion Foil Production

Guangdong Jiayuan

Guangdong Jiayuan, a leading Chinese copper foil producer, has reached an agreement with Switzerland-based trading firm IXM to purchase a significant quantity of copper cathode feedstock. The deal, valued at approximately 5.066 billion yuan ($694 million), is set to support Jiayuan’s expansion of refined copper foil production, which is critical for lithium-ion batteries, copper-clad laminates, and printed circuit boards.

Details of the Copper Cathode Purchase Agreement

The agreement between Jiayuan and IXM will see the Chinese company secure 60,000 tons of copper cathode from IXM’s Geneva operations between December 2024 and November 2025. Additionally, Jiayuan will purchase 10,000 tons of cathode from IXM’s Shanghai branch during 2025. The price of the copper cathode will be determined through a negotiated pricing methodology, which will be finalized when both parties sign the contract.

Jiayuan, with a production capacity of 100,000 tons per year of refined copper foil, has seen steady growth in its production. In the first half of 2024, the company produced 24,000 tons of copper foil, marking a slight increase of 0.1% year-over-year. This agreement will ensure a steady supply of high-quality copper cathode to meet the growing demand for copper foil in key sectors such as electric vehicle (EV) batteries and electronic components.

China's Booming Copper Foil and NEV Industries

China’s refined copper foil production capacity reached 1.6 million tons per year in 2023, a 51% increase from the previous year. Notably, the production capacity for lithium-ion copper foil—used in batteries for electric vehicles—rose sharply by 68%, reaching 950,000 tons per year in 2023. With China’s new energy vehicle (NEV) market expanding rapidly, the demand for lithium-ion copper foil is expected to grow significantly. Industry experts predict that deliveries of lithium-ion copper foil in China will reach 1.1 million tons per year by 2025.

The Chinese NEV industry is experiencing robust growth, with production rising by 35% to 11.345 million units in the first 11 months of 2024. Sales of NEVs have also surged, increasing by 36% over the same period. As the NEV market continues to expand, the demand for copper, particularly copper foil for lithium-ion batteries, is expected to increase, further driving the need for stable copper supply agreements like the one between Jiayuan and IXM.

Copper Market Trends and Prices

On December 12, 2024, Metalnomist-assessed grade-A copper cathode prices, based on the London Metal Exchange (LME) official cash prices, were in the range of $40-60 per ton cif Shanghai. These prices remained flat compared to December 10, but they had dropped from the previous range of $45-60 per ton observed on December 5 due to a rebound in copper prices during the week. The fluctuating prices highlight the importance of securing stable supply contracts for manufacturers like Jiayuan as copper remains a critical commodity in the transition to a low-carbon economy.

Shanghai Futures Exchange Approves Second Huayou Nickel Brand

On June 17, the Shanghai Futures Exchange (SHFE) gave the green light for listing nickel cathode full plates produced by Huayou's second-phase facility in Zhejiang province, eastern China.

This nickel cathode, boasting a 99.96% purity, is manufactured at Huayou’s Quzhou plant, which has an annual production capacity of 30,000 tons and employs the electrowinning process. Previously, nickel cathodes from another Huayou facility in Quzhou, with a smaller capacity of 6,000 tons per year, were registered by SHFE in June 2023.

The London Metal Exchange had already approved the listing of two Huayou brands in July 2023 and February 2024.

Typically, brands registered with exchanges enjoy a premium over non-exchange-deliverable products due to their enhanced liquidity.

China Sinopec CATL Investment Accelerates EV Battery Exchange Network Expansion

Sinopec CATL

China Sinopec CATL investment emerged as the state-controlled oil refiner became the largest cornerstone investor in the battery producer's record-breaking Hong Kong IPO. The strategic China Sinopec CATL investment supports the companies' ambitious plan to build 10,000 electric vehicle battery exchange stations nationwide, marking a significant shift for the traditional energy company toward new energy infrastructure as China's EV market continues rapid expansion.

Record IPO Success Validates Strategic Partnership Value

China Sinopec CATL investment positioned the oil refiner as the largest cornerstone investor in CATL's $4.6 billion Hong Kong IPO that became the world's largest listing in 2025. CATL shares surged over 16% in their Hong Kong trading debut on May 20th, closing at HK$306.2 compared to the IPO price of HK$263 per share. The successful market reception demonstrates strong investor confidence in the partnership strategy and China's EV infrastructure development plans.

Meanwhile, the two companies reached an initial agreement in April to build more than 500 EV battery exchange stations nationwide in 2025, with a long-term target of 10,000 stations. This ambitious infrastructure rollout leverages Sinopec's existing network of 30,000 integrated energy charging stations serving 300 million users, including approximately 10,000 EV charging and battery exchange stations already operational across China.

Strategic Project Targets Heavy Vehicle Transportation

However, Sinopec and CATL finalized a specific agreement on May 21st for the Qiji Exchange Station project focused on heavy trucks in Fujian province. The project will serve critical road freight transportation along the coastal route between the Yangtze River Delta and Pearl River Delta using CATL's latest battery exchange system technology. This heavy vehicle focus addresses a key market segment where battery exchange offers significant advantages over traditional charging methods.

Therefore, the heavy truck application demonstrates practical implementation of battery exchange technology for commercial vehicles requiring rapid turnaround times. The coastal corridor route represents one of China's most important freight transportation arteries, making successful deployment here a potential template for nationwide expansion. The project showcases how traditional energy companies can integrate new energy technologies into existing transportation infrastructure.

Traditional Energy Companies Embrace New Energy Transition

Furthermore, Sinopec's investment reflects broader trends among conventional energy companies accelerating investments in new energy markets. State-run energy firm PetroChina launched a "supercharger station" in Shanghai's Yili road area in March, demonstrating industry-wide recognition of EV infrastructure opportunities. These companies leverage existing real estate assets and customer relationships to enter growing new energy segments.

As a result, joint ventures between traditional energy companies and EV technology providers create synergistic opportunities for rapid infrastructure deployment. PetroChina, SAIC, Sinopec, and CATL established the Shanghai JieNeng Zhidui New Energy Technology joint venture in September 2022 to lease EV battery packs and develop battery exchange technology. CATL's construction of a 40 GWh annual capacity factory in Dongying, China's largest oil refining city, further strengthens these traditional energy sector connections.

The Metalnomist Commentary

Sinopec's cornerstone investment in CATL's record-breaking IPO exemplifies how China's traditional energy giants are strategically positioning themselves within the electric vehicle ecosystem, leveraging their existing infrastructure assets to capture new revenue streams in battery exchange services. The partnership's focus on heavy vehicle applications addresses a critical market need where battery exchange technology offers compelling advantages over conventional charging, potentially accelerating commercial EV adoption across China's logistics sectors.

SHFE Bolsters Nickel Futures Market with New Brand Listings

The Shanghai Futures Exchange (SHFE)

The Shanghai Futures Exchange (SHFE) has recently enhanced its nickel futures market by approving the registration of two new nickel brands, HUAYOUgx and CNGR, on 20 December. This decision marks a significant step in increasing market liquidity and underscores the growing influence of Chinese brands in the global metal markets.

New Additions to the Nickel Futures Market

HUAYOUgx is produced by Huayou, one of China's leading battery metals and materials producers, at its subsidiary in Yulin, located in the Guangxi province. This brand boasts a registered annual capacity of 30,000 tonnes per year. Similarly, CNGR, produced by CNGR's subsidiary in Quinzhou, Guangxi, has a registered capacity of 25,000 tonnes per year. These additions are part of SHFE's broader strategy to enhance the dynamics of its nickel futures offerings.

In 2024, SHFE approved four new brands, adding a total of 121,000 tonnes per year of newly registered capacity. This initiative is aimed at improving the liquidity of nickel trading on the exchange, making it more attractive for investors and industry stakeholders.

International Recognition and Future Prospects

Both HUAYOUgx and CNGR have not only secured approval from SHFE but also received green lights from the London Metal Exchange (LME) through its fast-track system earlier this year. The fast-track system expedites the process of listing new metal brands, facilitating quicker entry into the market.

Additionally, the LME is currently reviewing an application from another Chinese nickel producer, Jien, submitted on 25 November. Approval of Jien's brand would further extend the roster of Chinese and Asian nickel brands on LME, potentially increasing the total registered capacity for new brands from these regions to 126,600 tonnes and 176,600 tonnes per year, respectively.

China's Zichen Expands Anode Production Capacity Amid Market Fluctuations

Sichuan Zichen Technology

Sichuan Zichen Technology, a key player in the Chinese anode materials sector and a subsidiary of Shanghai Putailai, is ramping up production capabilities with the ongoing construction of its new facility in Sichuan province. The expansion is poised to enhance the company's anode material output significantly, aligning with the growing demands of the new energy vehicle (NEV) industry.

Major Expansion in Sichuan

The latest phase of Zichen’s production complex in Qionglai city includes a second stage that will add 100,000 tons per year to the existing capacity. Construction is set to wrap up by the end of this year, complementing the first phase that began operations in July with a similar output. By the end of 2025, the company expects to commission a third phase, adding another 80,000 tons annually, bringing the total design capacity to 280,000 tons per year.

Despite these ambitious expansions, Zichen's parent company, Putailai, has experienced a slight decline in sales, with 66,992 tons sold in the first half of the year—down 1.8% from 68,197 tons during the same period last year. The backdrop of this slowdown is a significant drop in graphite flake prices, which have hit a nearly six-year low, attributed to decreased anode prices stemming from slower growth in the NEV market.

Nevertheless, the NEV sector in China continues its upward trajectory, with production soaring by 32% year-over-year to 8.316 million units from January to September, while sales surged by 33% to 8.32 million during the same timeframe, according to the China Association of Automobile Manufacturers (CAAM).

Copper Prices Set to Rise Amid US Federal Reserve Rate Cut, but Short-Term Volatility Expected

The recent decision by the US Federal Reserve to cut interest rates is sparking predictions of higher copper prices, particularly from Chinese market participants. This optimism stems from expectations that a weaker US dollar will increase demand for copper, especially in the property sector. Historically, copper and the US dollar have an inverse relationship, as copper is priced in dollars, making it cheaper for buyers using other currencies.

On September 18th, the Federal Open Market Committee (FOMC) reduced the federal funds rate by 50 basis points, bringing it down to a range of 4.75-5%. This move marks the first interest rate cut since 2020, and policymakers have signaled that further reductions are likely before the end of 2024. Another 100 basis points of cuts are anticipated in 2025.

Chinese analysts believe this rate cut could encourage similar actions in China, particularly in the property market, potentially driving copper demand. "China is likely to follow the US to lower its borrowing costs especially on the property market, which may boost copper demand from the property market," an industrial analyst told Metalnomist. This development may further bolster copper prices in the medium term.

Copper prices remained relatively stable following the Fed's announcement, with only minor fluctuations recorded on both the London Metal Exchange (LME) and the Shanghai Futures Exchange (SHFE). Three-month LME copper prices saw a slight drop of 0.2%, settling at $9,382.5 per ton, while SHFE’s most traded October copper contract rose by 0.43% to 74,760 yuan per ton.

Despite these indicators, not everyone shares the same optimism. Some market participants expect copper prices to soften in the short term, as the rate cut had been widely anticipated. “The market has already digested the interest rate cut and copper prices had risen this week,” a trader remarked to Metalnomist. A relatively high SHFE contract price, nearing 75,000 yuan per ton, may also put pressure on downstream producers.

On the supply side, copper inventories in China are declining as downstream producers restock for the Mid-Autumn Festival. The SHFE copper stocks fell from 241,745 tons on August 30th to 185,520 tons by mid-September. This stock drawdown is providing some bullish momentum for copper prices, although some analysts remain cautious about the sustainability of this trend.

Overall, while some analysts are bullish due to falling inventories and expectations of looser monetary policy in both the US and China, others remain skeptical about the near-term outlook for copper prices, citing the market’s earlier response to the expected rate cut.

Chinese PV Industry Faces Overcapacity and Profit Losses: IEA Reports

Iea(The International Energy Agency)

The International Energy Agency (IEA) has issued a concerning report highlighting the overcapacity and declining profitability in China’s photovoltaic (PV) industry, which is the dominant force in the global solar energy supply chain. The report, presented during a webinar this Thursday, sheds light on the financial struggles faced by major Chinese manufacturers such as JA Solar Technology and LONGi Green Energy Technology, which have reported significant losses in their recent financial statements.

According to Izumi Kaizuka, an analyst at the IEA, the mood at the 17th SNEC PV conference in Shanghai this June was grim. Kaizuka quoted the founder of GCL Group, a major PV manufacturer, who expressed concern that the Chinese PV industry is "entering an ice age" due to a severe imbalance in supply and demand. The report also highlighted the bankruptcy of Zhejiang Akcome, one of China’s leading PV manufacturers, earlier this year, with the IEA predicting more closures in the near future.

China's Dominance in Global PV Production

Despite the struggles at home, China continues to dominate the global PV industry. In 2023, China accounted for more than half of the 456GW of global solar power capacity added, and nine of the top 10 PV suppliers in the first half of 2024 were Chinese-owned. The country has increased its production share across all segments of the PV supply chain, including polysilicon, crystalline silicon wafers, solar cells, and PV modules, with its share reaching 92%, 98%, 92%, and 85%, respectively, in 2023.

The rapid expansion of China’s PV capacity is evident, with the country increasing its own year-on-year solar additions by 123% from 2022 to 2023, followed by Italy (113%) and Germany (109%). However, the global demand for PV capacity is pushing countries like the EU and the US to expand their own solar production capabilities, with the EU installing over 56GW in 2023 alone.

The EU's Push for Solar Manufacturing

In response to its growing reliance on Chinese imports, the European Union (EU) has set ambitious targets to scale up domestic production of PV panels. Under the Net-Zero Industry Act, the EU aims to produce at least 40% of its annual needs for strategic net-zero technologies—including solar panels—by 2030. With current production at under 5GW annually, the EU is planning to ramp up its manufacturing capacity to 30GW per year by 2030 in order to meet its renewable energy goals.

As the global PV market faces challenges like overcapacity and supply-demand imbalances, the role of China in driving production and the EU’s efforts to boost its domestic capabilities will shape the future of the solar industry.

US Copper Flows Shift West as Washington Targets African Supply Chains

Copper

US copper flows are becoming a strategic policy priority as Washington seeks to redirect African copper away from China-oriented supply chains and into western manufacturing networks. The shift shows how copper is moving beyond its traditional role as an industrial commodity.

US policymakers are pursuing a dual strategy. They want to accelerate domestic copper projects and processing while also securing international copper sources that can feed US and allied supply chains faster.

The Democratic Republic of Congo has become central to this effort. The country offers high-quality resources and faster supply potential than many long-dated greenfield copper projects.

US copper flows are therefore being reshaped through offtake agreements, financing structures, infrastructure plans and strategic partnerships. The goal is to create secure mine-to-end-use supply chains that support American manufacturing and reduce dependence on China-linked material routes.

African Copper Becomes a Strategic Supply Target

The DRC’s copper output has historically moved east into Chinese-controlled or China-oriented value chains. Washington now wants to build alternative routes that connect African copper to the US and allied industrial base.

This is not only about copper cathode or concentrate volumes. It is about who controls logistics, financing, offtake, processing and final market access.

The US is already using state-backed financing and trading structures to compete for African copper and cobalt. The DRC, Zambia and Guinea are emerging as priority jurisdictions in this wider mineral strategy.

Glencore’s possible sale of a 40% stake in two DRC copper-cobalt mines to the US-backed Orion Critical Mineral Consortium shows how policy and capital are beginning to move together. More US interest is also emerging in Congolese copper-cobalt, manganese, gold and lithium assets.

This matters because China has built deep influence across African mining, processing and trading channels. Western buyers cannot change copper flows only by expressing demand. They need financing, infrastructure, political support and long-term offtake commitments.

The US strategy also reflects a broader recognition that copper supply security cannot rely only on domestic mines. US copper resources are substantial, including brownfield leach opportunities and idle stockpiles, but permitting remains a major constraint.

International supply partnerships can move faster than many US projects. That makes African copper strategically valuable as Washington tries to support manufacturing, grid expansion, defence supply chains and electrification.

Inventory Distortions Change Copper Market Economics

US copper flows are also being affected by tariff expectations and inventory shifts. Around 1.9mn-2mn t of copper metal inventory is now sitting globally, with roughly 1.2mn t located in the US.

That is an unusually high share because the US consumes about 2mn t/yr, while China consumes roughly 15mn t/yr. The result is a market where headline global stocks look large, but copper outside the US can feel much tighter.

This inventory concentration changes copper economics. The same copper unit can carry different value depending on location, policy exposure, tariff risk and available delivery route.

That marks a major shift from the older copper market model. Copper was once priced mainly around construction cycles, manufacturing demand and visible exchange stocks. It is now increasingly priced around jurisdiction, logistics and strategic access.

The CME-LME arbitrage has reopened to encourage flows into the US. This reflects how policy expectations can pull metal across regions even when global balances appear more comfortable.

Physical demand remains supportive. Chinese demand has stayed resilient, Yangshan premiums have strengthened, and Shanghai inventories have continued to draw. These signals suggest that the broader copper market remains tighter than simple stock numbers imply.

Copper’s role in grids, electrification and data centres has also changed how governments view the metal. Copper is now becoming a strategic asset for industrial policy, not only a material input for construction and manufacturing.

The biggest commercial opportunities may therefore shift from pure price arbitrage to control over flows. Traders, miners and governments will increasingly compete through logistics, financing, offtake and jurisdictional positioning.

US copper flows will remain central to that competition. The race is no longer only about producing more copper. It is about deciding where copper goes, who processes it and which industrial systems it supports.

The Metalnomist Commentary

Copper is becoming a policy metal because electrification has turned physical access into a strategic advantage. The next copper cycle will not be defined only by price, but by who controls African supply routes, financing and end-use allocation.

LME Approves Hong Kong as a Warehouse Location, Strengthening China’s Metal Supply Chain

LME Hong Kong

A Strategic Move to Expand Market Access

The London Metal Exchange (LME) has officially approved Hong Kong as a warehouse location, providing a new entry point into China, the world’s largest metals consumer. This development allows LME-registered metals, including aluminium, copper, lead, nickel, tin, zinc, and aluminium alloy, to be stored in Hong Kong. As a result, the city is set to become a critical hub for LME-warranted metal storage once warehouse companies receive approval in the next three months.

Enhancing Connectivity to the Chinese Market

LME Chief Executive Matthew Chamberlain highlighted the importance of this expansion, stating that Hong Kong’s proximity to China makes it a natural hub for metals trade and logistics. The move strengthens the LME’s global warehousing network, which currently includes 465 approved warehouses in 32 locations worldwide. The exchange considers various factors, including regulatory frameworks, fiscal conditions, and transport infrastructure, when approving new locations.

Despite this progress, efforts to establish LME warehouses in mainland China have faced regulatory challenges. Both China’s regulators and the Shanghai Futures Exchange (SHFE), a key competitor to the LME, have resisted these moves. Nevertheless, the approval of Hong Kong presents an alternative solution, allowing international metal traders better access to the Chinese market.

Strong Market Interest in Hong Kong as a Metal Hub

The LME has received strong interest from warehouse operators, landlords, and metal owners regarding Hong Kong’s listing as a metals delivery point. This approval is expected to increase liquidity and provide a more efficient supply chain for global metals traders. As the first warehouse companies gain approval, Hong Kong is likely to play a pivotal role in global base metal storage and distribution.

By positioning Hong Kong as an LME metal storage location, the exchange strengthens its presence in Asia, bridging the gap between international metal markets and China’s growing demand. This move not only benefits global traders but also reinforces Hong Kong’s status as a key financial and logistics hub in the metals industry.

CMOC Copper Output Rises as DRC Mines Strengthen China Supply

CMOC

CMOC copper output increased in the first quarter of 2026 as higher production from the company’s Democratic Republic of Congo copper-cobalt mines lifted supply. The Chinese diversified metals producer produced 187,880t of copper in January-March, up 10% from a year earlier.

CMOC copper output was supported by stronger production at the Tenke Fungurume and Kisanfu mines. These assets are central to China’s copper and cobalt feedstock security because they supply large volumes of cathode and intermediate material from one of the world’s most important copper-cobalt districts.

CMOC copper output is expected to remain a major market focus this year. The company is targeting 760,000-820,000t of copper production in 2026, after producing 741,100t in 2025.

The result reinforces the DRC’s role as China’s largest imported copper cathode source. China imported 275,359t of copper cathode from the DRC in the first quarter, equal to 37.5% of total imports.

Tenke and Kisanfu Anchor CMOC’s Copper Growth

CMOC’s first-quarter copper growth reflects the scale and strategic importance of its DRC operations. Tenke Fungurume and Kisanfu remain core assets for the company’s copper-cobalt portfolio.

The company plans to expand output at Kisanfu by adding 100,000 t/yr of copper cathode capacity. Completion is targeted for 2027.

The expansion could also lift cobalt capacity. CMOC has not disclosed the planned increase, but market participants expect Kisanfu’s cobalt capacity to rise by more than 30,000 t/yr.

This matters because copper and cobalt are increasingly linked in DRC project economics. Higher copper output can bring additional cobalt units into the market, depending on ore composition, processing rates and export rules.

The London Metal Exchange approval of CMOC’s TFM-1 copper cathode brand adds another layer of market significance. The brand, produced at Tenke Fungurume, was approved for listing on 27 March and has a registered production capacity of 270,000 t/yr.

Exchange approval improves brand visibility and market acceptance. It can also support trade liquidity, financing and customer confidence for DRC-origin copper cathode.
China’s copper cathode import structure shows why this is important. The DRC already supplies more than one-third of China’s imported cathode, making Congolese supply critical to Chinese refined copper availability.

The China grade-A copper cathode premium was steady at $55-70/t cif Shanghai on 23 April. The range narrowed from $55-75/t a week earlier, showing a relatively stable but cautious spot market.

Cobalt Output Stays Flat as Quotas Restrict Feedstock Flows

CMOC’s cobalt production was largely unchanged in the first quarter. The company produced 30,508t of cobalt, up only 0.3% from a year earlier.

The company set its 2026 cobalt output guidance at 100,000-120,000t. That is broadly stable against 117,549t produced in 2025.

The flat cobalt outlook reflects a more complicated market. The DRC suspended cobalt feedstock exports from 22 February to 15 October 2025 before moving to a quota-based export system for the fourth quarter of 2025 and for 2026-27.

Administrative delays have slowed the quota system. The DRC extended fourth-quarter 2025 quotas to 31 March 2026 because of slow processing.

The effect on Chinese imports has been severe. China imported only 1,278t cobalt metal equivalent of cobalt intermediate feedstock in January-February, down 96% from a year earlier.

Cobalt hydroxide prices remained stable at $25.95-26.10/lb cif China on 23 April. But the stability masks a market still shaped by restricted DRC export flows, delayed allocations and uncertainty over quota administration.

For CMOC, the copper side of the portfolio is showing clear growth. The cobalt side remains more exposed to policy risk, export controls and administrative timing in the DRC.

The Kisanfu expansion could increase future cobalt availability, but the market impact will depend on whether DRC export rules allow material to move smoothly to downstream refiners.

The Metalnomist Commentary

CMOC’s first-quarter results show that DRC copper remains essential to China’s refined copper supply, while cobalt is increasingly constrained by policy rather than production alone. The strategic issue is no longer just mine output, but whether export quotas, brand approvals and logistics can keep critical metal flows moving.

China's Major Steel Producers Cut Output in August

China's Steel

China's largest steel-producing provinces reported significant decreases in output during August, with Hebei province leading the drop at 18 percent. According to data from the National Bureau of Statistics (NBS), the five key provinces—Hebei, Jiangsu, Shandong, Liaoning, and Shanxi—collectively produced 40.3 million tons of steel in August. This represents a 13 percent decline from the previous year, accounting for 51.7 percent of the nation's total steel output for the month.

Hebei, the top steel producer in China, saw its output shrink to 14.89 million tons, an 18 percent decrease. Jiangsu's production fell by 12 percent, reaching 9.35 million tons. Shandong and Shanxi reported similar year-on-year declines of 12 and 13 percent, respectively, while Liaoning's steel output dropped marginally by 0.7 percent to 5.65 million tons.

The nationwide steel output also followed the downward trend, declining by 10.4 percent compared to the same period last year. In the first eight months of 2024, China's steel production decreased by 3.3 percent, with the top five provinces experiencing a 5.6 percent reduction.

Steel Prices and Demand

Several factors contributed to this cutback in production, including falling steel prices and weak demand. Shanghai’s hot-rolled coil (HRC) ex-warehouse prices hit a seven-year low in August, dropping by 260 yuan per ton ($36.90) from the beginning to the end of the month. The decline in prices and the sluggish real estate market forced many steel mills to reduce production to clear out inventory based on old standards before the new national rebar standard takes effect in September.

However, experts expect Chinese steel mills to increase production in September after August's maintenance period, as demand is likely to recover from the summer slump.

Tesla LFP cell production stays on track as US cathode push advances

Tesla LFP cell

Tesla LFP cell production remains on schedule as the company advances US lithium refining and cathode output. The plan prioritizes onshore battery materials and the first domestic LFP cells this year. The strategy targets energy storage markets alongside vehicle electrification.

Refining, cathode and storage milestones

Tesla said its LFP cell factory in Sparks, Nevada is nearing completion. The company began operating a lithium hydroxide refinery near Corpus Christi in December 2024. Energy storage deployments rose 2% to 9.6GWh in the recent quarter. Tesla also deployed the first Megapacks from its Shanghai factory. The company said paired solar and Megapack systems are cost-competitive with fossil power.

Demand, profitability and policy headwinds

Quarterly deliveries fell to 384,122 EVs, from 443,956 a year earlier. Second-quarter profit slipped 16% to $1.2bn on lower volumes and pricing. Tesla launched a Robotaxi service in Austin and introduced Model Y in India. The company reported market share declines across the US, Canada, Europe and China. Tesla LFP cell production remains central to its US supply chain plans.

However, tariff and policy shifts are pressuring margins. Tesla estimated about $300mn in added tariff costs this year. Two-thirds affect the automotive segment and the rest the energy business. The company cited challenges from the July 4 tax and energy law and tariffs. The $7,500 US tax credit repeal by quarter-end limited domestic vehicle supply. Management said early credit expirations also weigh on residential storage demand. Tesla LFP cell production is intended to offset import exposure over time.

The Metalnomist Commentary

Tesla’s domestic cathode and LFP build-out lowers geopolitical and tariff risk across its battery supply chain. Watch commissioning pace in Sparks and ramp efficiency at Corpus Christi for cost traction. Policy volatility remains the swing factor for US demand and profitability.

Jiangxi Copper Opens First Tungsten Open-Pit Mine in Kazakhstan

Jiangxi Copper

China's Jiangxi Copper Launches Groundbreaking Tungsten Mine in Kazakhstan

In a significant development for the global mining industry, China's Jiangxi Copper, in partnership with Hong Kong's Jiaxin International Resource Investment, has inaugurated Kazakhstan's first tungsten open-pit mine. This new venture, located at the Boguta tungsten deposit, marks a monumental investment in the country’s mining sector, valued at $300 million. With the mining complex's operational capacity set to reach 3.3 million tons per year, the project is expected to produce around 10,000 tons annually of 65% tungsten concentrate.

The project will also undergo further expansion with the construction of a deep processing facility designed to refine tungsten to 88.5%, enabling the production of high-purity tungsten carbide. The total investment in the facility is projected to be $150 million. Confirmed reserves at the site are estimated to be approximately 120 million tons, cementing the mine's long-term potential as a critical player in global tungsten production.

A Collaborative International Effort

This ambitious project is a collaboration among several major players. In addition to Jiangxi Copper and Jiaxin International, China Railway Construction, China Civil Engineering Construction, and Ever Trillion International from Singapore are also involved. Kazakhstan's national investment company, Kazakh Invest, has contributed $50 million to the project, underscoring the strategic importance of this venture for Kazakhstan's economy.

This new mine is set to strengthen the economic ties between China and Kazakhstan. Kazakh President Kassym-Jomart Tokayev, during a recent visit to Shanghai, outlined plans to double bilateral trade turnover with China, which reached an impressive $41 billion last year. The two countries have already signed agreements in multiple sectors, including metallurgy, energy, and machinery, which signal the growing influence of China in Kazakhstan's economic landscape.