Zhejiang Zhongneng Expands Lithium Carbonate Output as China Strengthens Battery Material Supply Chain

Zhejiang Zhongneng

Phase one of major lithium project goes online, boosting domestic capacity and intensifying price pressure

China’s New Era Group Zhejiang Zhongneng Cycle Technology has begun production at its new lithium carbonate facility in Shaoxing, Zhejiang province. The site launched with 10,000 tonnes per year (t/yr) capacity in phase one, marking a key milestone in China’s battery materials expansion strategy.

The company originally announced the project in 2023, targeting total output of 30,000 t/yr of lithium carbonate and 150,000 t/yr of iron phosphate. When fully operational, the facility will significantly increase the country’s supply of key battery-grade materials.

Lithium supply surge expected to influence market prices

With the new line now operational, Zhejiang Zhongneng has raised its total lithium carbonate capacity from 8,000 t/yr to 18,000 t/yr. The firm has not yet shared a launch date for the project’s second phase. Market participants expect that increasing supplies—especially from China—could put downward pressure on lithium prices in the near term.

The facility uses feedstock primarily from recycled lithium-ion batteries and crude cobalt hydroxide, underlining China’s push for a circular economy in battery raw materials. The firm also produces cobalt sulphate, cobalt chloride, cobalt metal, and nickel sulphate.

Nickel and cobalt expansion complements lithium growth

In 2024, Zhejiang Zhongneng produced 10,000 tonnes of cobalt (metal equivalent) and now targets 12,000 tonnes for 2025. The company also plans to double nickel production from 3,000 tonnes to 6,000 tonnes this year, strengthening its multi-metal portfolio for battery supply chains.

Competition is also heating up abroad. On 12 February, Ganfeng Lithium launched a 20,000 t/yr lithium chloride facility in northern Argentina, part of its Mariana project. With both domestic and international supply set to grow, market sentiment will remain under pressure in 2025.

LME Approves Listing of China's Greatpower Co. Cobalt Cathode

Greatpower

The London Metal Exchange (LME) has officially approved the listing of Zhejiang Greatpower Co.'s GREATPOWER brand cobalt cathode. This milestone, announced on December 17, 2023, marks a significant step for the Chinese cobalt industry in gaining global recognition. Greatpower, a major player in cobalt production, operates a state-of-the-art cobalt cathode facility in Shangyu district, Shaoxing city, located in eastern China’s Zhejiang province.

Expansion Plans for Greatpower

Since its launch in 2022, the Greatpower cobalt cathode facility has maintained a production capacity of 2,000 tons per year (t/yr). Looking ahead, the company is set to double its output by 2025, with plans to reach 4,000 t/yr. This expansion will help Greatpower meet the growing global demand for refined cobalt, particularly as cobalt remains essential for energy storage technologies, electric vehicle (EV) batteries, and other high-tech industries.

China’s Growing Cobalt Production Capacity

Greatpower’s refined cobalt output, which includes cobalt sulphate, cobalt chloride, and cobalt cathode, contributes to the nation’s rapidly expanding capacity in cobalt metal production. In 2023, the price premium for cobalt metal over cobalt salts has encouraged domestic refineries to increase their production. According to market forecasts, China’s cobalt metal capacity is expected to more than double, reaching around 65,000 tons in 2024, with further potential for growth to 80,000 tons by 2025.

Key players in China's cobalt industry, including Jinchuan, Huayou, GEM, Hanrui, Tengyuan, and Guangxi Yinyi, are expanding their operations. New entrants such as CNGR and New Era Group Zhejiang Zhongneng are also slated to launch production lines in 2024.

Impact of LME Listings

The LME’s approval of cobalt cathodes from China is expected to slightly ease the oversupply in the domestic market. Other Chinese cathode brands already listed on the LME include those from Jinchuan, Yantai Cash Industrial, GEM (Jiangsu) Cobalt Industry, Quzhou Huayou Cobalt New Material, Ganzhou Tengyuan Cobalt New Material, and Zhejiang Greatpower Cobalt Materials. With increasing global demand for cobalt, these listings offer greater market access for Chinese producers while contributing to a more balanced global cobalt supply.

China’s C&D Begins Construction of Major Lithium Carbonate Plant in Sichuan

Xiamen C&D

$144 Million Investment to Boost Battery-Grade Lithium Supply for EV Industry by 2027

Xiamen C&D, a Chinese state-owned conglomerate, has launched construction of a large lithium carbonate production facility in Dazhou, Sichuan province, in partnership with Jiangxi Kexiang Enterprise Management. The new project targets China's fast-growing electric vehicle (EV) supply chain, with a projected total capacity of 140,000 tons per year of battery-grade lithium carbonate.

The project, valued at 1.05 billion yuan ($144 million), will be developed in three phases. The first phase, expected to produce 40,000 tons per year, is scheduled to begin operations by the end of 2025. Full-scale production is planned for completion by 2027, reflecting China's continued investment in core battery materials infrastructure.

Lithium Carbonate Capacity Expands Amid EV Boom

Lithium carbonate remains a critical raw material for lithium-ion batteries, which power the majority of electric vehicles globally. China, as the world’s largest EV market, continues to increase domestic production to reduce reliance on imports and stabilize raw material prices.

Alongside this project, other major players like Zhejiang Zhongneng have also ramped up output. On February 17, the company launched its new facility in Shaoxing, Zhejiang province, with an initial capacity of 10,000 tons per year.

However, experts warn that rapid capacity expansion across China may be outpacing demand. Oversupply could continue to weigh on lithium carbonate prices, which have already declined from their 2022 highs. Despite this, long-term fundamentals remain strong as EV adoption continues worldwide.