Defu Copper Foil Facility Targets AI and New Energy Demand Growth

Defu Technology

Defu copper foil facility plans will add another major layer of Chinese capacity for high-end electronic circuit materials as artificial intelligence, communications and energy transition sectors lift demand for specialised copper products. Defu Technology will invest 3.1bn yuan to build the project in Jiujiang, Jiangxi province.

Defu copper foil facility development will be focused on high-end AI electronic circuit copper foil. The project will be built in two phases, each with 25,000 t/yr of production capacity.

Defu copper foil facility timing has not yet been disclosed. But the investment signals continued confidence in downstream copper demand linked to AI infrastructure, 5G and 6G communications, low-earth-orbit satellites and new energy applications.

The company already had 175,000 t/yr of copper foil capacity at the end of 2025. Its output rose by 50% to 139,600t last year, while sales increased by 52% to 140,900t.

AI Infrastructure Adds New Demand Layer for Copper Foil

Copper foil is becoming more strategically important as electronics, batteries and data infrastructure demand higher-performance materials. AI systems require dense electronic circuits, high-speed signal transmission and reliable thermal and electrical performance.

Defu’s new project targets that shift. High-end electronic circuit copper foil is used in printed circuit boards and advanced electronics, where quality, thickness control and surface performance can determine reliability.

AI-related demand is still emerging, but it is already becoming relevant to copper markets. Some market participants estimate global copper demand from AI-related applications could reach around 350,000t in 2026.

That demand does not come only from data-centre power cables. It also includes circuit materials, cooling systems, electrical equipment, grid connections, transformers and backup power infrastructure.

Defu is therefore positioning itself closer to higher-value copper demand. The company is not simply expanding commodity capacity; it is targeting sectors where copper foil quality and customer qualification matter.

New Energy and Electronics Support Capacity Expansion

Energy transition sectors remain a key driver for electrolytic copper foil demand. Copper foil is widely used in lithium-ion batteries, especially as current collector material for anodes.

China’s copper foil operating rates improved significantly in 2025. Average electrolytic copper foil operating rates rose to 77.1%, up by 18.8 percentage points from a year earlier.

That recovery reflects stronger downstream demand from battery, electronics and new energy markets. It also helps explain why producers such as Defu are still adding capacity despite competition across China’s materials sector.

The planned Jiujiang facility will lift Defu’s ability to serve multiple growth markets. These include AI hardware, communications equipment, satellites, batteries and other high-end electronics.

However, expansion also raises competitive pressure. As more Chinese copper foil capacity enters the market, producers will need to differentiate through product quality, customer qualification and exposure to higher-margin applications.

For copper demand, the project reinforces a broader structural point. Electrification is no longer limited to EVs and grids. AI, satellites, communications and advanced electronics are adding new copper-intensive demand channels.

The Metalnomist Commentary

Defu’s investment shows that copper demand is becoming more technology-driven and more specialised. The strongest copper foil producers will be those that can move beyond volume growth and qualify into AI, battery and high-end electronics supply chains.

Lithium-Ion Battery Copper Foil Shipments Surge as Ultra-Thin Products Gain Share

Copper Foil

Lithium-ion battery copper foil shipments rose sharply in 2025 as global battery production expanded and manufacturers shifted toward thinner materials to reduce copper costs. Global shipments reached 1.302mn t, up 41.7% from 2024, according to Chinese research institute EV Tank.

Lithium-ion battery copper foil demand remains closely tied to electric vehicle and energy storage growth. Copper foil is a key current collector in lithium-ion batteries, making it essential to cell performance, energy density and manufacturing cost.

Lithium-ion battery copper foil shipments were dominated by China, which accounted for 82.9% of global deliveries in 2025. EV Tank expects global shipments to reach 2.615mn t by 2030, implying continued expansion as battery output scales.

The product mix changed quickly during the year. The share of 8μm foil declined, while 6μm remained the mainstream product and accounted for more than 70% of total shipments.

Ultra-Thin Foil Gains Momentum on Copper Cost Pressure

Ultra-thin copper foil gained share as battery producers looked for ways to reduce copper input costs. Persistently high global copper prices pushed cell manufacturers to use thinner foil while maintaining battery performance.

The combined share of 5μm and 4.5μm ultra-thin foil rose to 24% in 2025. This is a major shift for a material category that requires tighter production control, better surface quality and stronger consistency.

Thinner copper foil can help reduce battery weight and improve energy density. It also lowers the amount of copper used per cell, which becomes increasingly important when copper prices remain elevated.

EV Tank expects 5μm and thinner foil to become a key material for high-end batteries. This reflects the industry’s move toward lighter, higher-energy-density cell designs.

However, thinner foil also raises manufacturing difficulty. Producers must control pinholes, tensile strength, elongation, surface roughness and coating compatibility more precisely.

That technical barrier could separate higher-end suppliers from lower-cost producers. As battery customers shift toward thinner grades, qualification and process reliability will become more important than simple capacity.

China Leads Supply as Competition Intensifies

China’s 82.9% share of global shipments shows its dominant role in battery copper foil supply. The country has built large-scale capacity around its lithium-ion battery ecosystem, supported by domestic EV, energy storage and cell manufacturing growth.

Competition intensified in 2025 as the market recovered and producers brought earlier-built capacity on line. This created a more fluid ranking among suppliers.

Longdian Wason ranked first with a 12.2% market share. Huachuang New Material followed after capacity ramp-ups lifted output and sales.

Defu Technology and Jiayuan Technology ranked third and fourth, respectively. Seven companies in the top 10 changed positions during the year, showing how quickly capacity, customer access and product mix are reshaping the sector.

Battery makers also increased procurement from second-tier suppliers to improve supply stability. This suggests buyers are trying to diversify supplier bases rather than rely only on leading producers.

For copper markets, the trend is strategically important. Battery copper foil growth creates a direct link between copper demand and battery technology. But the move toward ultra-thin foil also means battery growth will not translate into copper demand on a simple one-to-one basis.

The sector is therefore entering a more technical phase. Volume growth remains strong, but material intensity, foil thickness, supplier qualification and copper price pressure will all shape future demand.

The Metalnomist Commentary

The copper foil market shows how battery growth can lift copper demand while also forcing material thrift. High copper prices are pushing battery makers toward thinner foil, making technology and process control as important as raw capacity.

China copper foil supply deal locks in Baijiada CALB copper foil volumes through 2028

Copper Foil

China copper foil supply deal activity is accelerating as battery makers lock in inputs. Shenzhen Baijiada New Energy agreed to supply 373,000 tonnes of copper foil to CALB from 2026 to 2028. Meanwhile, the company also committed to deliver 45,000 tonnes in 2025. China copper foil supply deal structures like this are reshaping procurement strategies across the battery chain.

Baijiada will deliver 58,000 tonnes in 2026, 130,000 tonnes in 2027, and 185,000 tonnes in 2028. The contract signals confidence in long-cycle EV and storage demand. Therefore, Baijiada CALB copper foil volumes now function like an anchor order. That anchor can influence capacity planning, financing, and raw copper sourcing.

Battery output growth pushes battery copper foil demand higher

Battery copper foil demand continues to rise as China expands power and energy storage output. China’s battery industry reported 1,292.5GWh of production in January to October. Installed volume reached 578GWh over the same period. Meanwhile, CALB posted 40.65GWh of installed capacity, or 7% nationally. As a result, battery copper foil demand remains one of the fastest scaling material pull factors.

China also increased new energy vehicle production to 13.015mn units in the first ten months. Sales reached 12.943mn units over the same timeframe. Therefore, the China lithium battery supply chain is preparing for additional downstream growth. CAAM expects domestic sales to approach 16mn units in 2025.

Capacity expansion intensifies competition in China’s copper foil sector

China’s copper foil industry is expanding quickly and raising execution pressure. Industry estimates place refined copper foil capacity at 2.24mn t/yr in 2024. That marks a 34% increase versus the prior year. Meanwhile, Baijiada operates 140,000t of annual capacity today. Its parent group plans to expand total capacity to 300,000t/yr by 2030.

EV copper foil consumption strengthens the demand floor for multi-year contracts. Industry estimates suggest each battery electric vehicle can use up to 38kg of copper foil. Therefore, China copper foil supply deal commitments can de-risk utilization. However, rapid capacity additions can still compress margins. Producers must optimize quality, yield, and delivery reliability.

The Metalnomist Commentary

Long-dated offtake contracts now act as capacity “tickets” in China’s battery materials race. However, the sector must balance scale with pricing discipline as capacity surges. Therefore, operational efficiency and customer stickiness will decide the next winners.

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.

Huachuang and Cornex Ink Major Lithium-Ion Battery Copper Foil Deal

Copper Foil

Huachuang New Material and Cornex have signed a strategic lithium-ion battery copper foil deal, securing 150,000t of supply over five years. The agreement, finalized on April 27, underlines the accelerating demand for copper foil in China's booming battery and new energy vehicle (NEV) industries. Huachuang, a subsidiary of Huayou Group, will fulfill the order from its three major production bases across China.

Copper Foil Supply Grows with NEV Expansion

China’s lithium-ion battery copper foil deal volume reflects its growing production capacity. The country’s total refined copper foil capacity hit 2.24mn t/yr in 2024, with 1.4mn t/yr dedicated to lithium-ion battery production. Rising NEV output and energy storage battery installations are driving this surge. From January to March 2025, NEV production reached 3.182mn units, a 50% increase year over year.

Cornex Ramps Up as Demand Accelerates

Cornex, though holding just 0.54% of China’s battery installations, is expanding its market role through this copper foil partnership. The deal positions the firm to meet future EV battery demand, where a single vehicle requires up to 38kg of copper foil. Meanwhile, China's total lithium-ion battery copper foil shipments are projected to reach 1.1mn t/yr in 2025.

The Metalnomist Commentary

This lithium-ion battery copper foil deal signals sustained growth in China’s battery supply chain. With copper foil emerging as a critical input, strategic partnerships like Huachuang and Cornex’s will shape regional and global battery material markets in 2025 and beyond.

Hailiang Saudi Copper JV Targets Middle East Processing Growth

Rawas

Hailiang Saudi copper JV plans will give Chinese copper products producer Zhejiang Hailiang a new manufacturing platform in Saudi Arabia. The company plans to form a joint venture with Saudi investment firm Rawas to build a $566mn copper processing plant at the port of Dammam.

The Hailiang Saudi copper JV is planned with 150,000 t/yr of copper processing capacity. The plant will include copper pipes, copper bars, recycled copper and copper foil, giving the project a broad downstream product mix.

The agreement gives Hailiang a 51% stake in the venture, while Rawas will hold 49%. The project still requires approval from the Saudi government and Hailiang’s shareholders before the partners finalise the investment.

The Hailiang Saudi copper JV reflects a wider shift in the copper products industry. Chinese processors are increasingly looking overseas to secure market access, reduce trade exposure and position closer to growth regions in the Middle East, Europe and Africa.

Dammam Plant Adds Copper Foil and Recycling Capacity

The planned Dammam plant will include 30,000 t/yr of copper pipe capacity and 20,000 t/yr of copper bar capacity. These products support construction, cooling systems, power infrastructure, industrial equipment and manufacturing supply chains.

The project also includes 50,000 t/yr of recycled copper capacity. This is strategically important because copper scrap is becoming a more valuable feedstock as concentrate markets tighten and buyers seek lower-carbon copper units.

The planned 50,000 t/yr of copper foil capacity adds a higher-value growth angle. Copper foil is used in batteries, electronics, printed circuit boards and advanced electrical applications. That gives the project relevance beyond traditional copper tube and bar markets.

The product mix suggests Hailiang is not only targeting commodity copper processing. It is building a downstream platform that can serve infrastructure, energy, electronics and battery-related demand from one regional base.

Dammam also offers logistical value. A port location can support raw material imports, finished product exports and access to Gulf, African and European customers. This could help Hailiang build a wider regional distribution network.

Saudi Arabia Gains Value-Added Copper Manufacturing Role

Hailiang said it aims to capitalise on Saudi Arabia’s copper ore resources, energy cost advantages and policy environment. These factors align with Saudi Arabia’s wider ambition to expand industrial manufacturing and mineral value chains.

For Saudi Arabia, the project could support a shift from resource availability toward value-added processing. Copper products are increasingly important for grids, buildings, cooling systems, EV infrastructure, renewable energy and industrial electrification.

The inclusion of recycled copper also fits the growing importance of circular metal supply. If Saudi Arabia can combine scrap collection, energy advantages and downstream manufacturing, it could strengthen its role in regional copper supply chains.

However, the project faces uncertainty. Hailiang said it is closely monitoring Middle East developments and their potential impact on site selection, construction progress, personnel safety and future operations.

The construction timeline has not yet been fixed. The partners will determine the schedule according to market conditions after the joint-venture agreement receives the required approvals.

This cautious approach is important. Middle East industrial projects can offer strong energy and logistics advantages, but geopolitical risk, financing timing, permitting and supply-chain security can still affect execution.

The Metalnomist Commentary

Hailiang’s Saudi venture shows how Chinese copper processors are internationalising downstream capacity, not only exporting products. The project’s real value lies in combining copper foil, recycling and regional market access inside Saudi Arabia’s industrial diversification strategy.

Cornex–Dongfeng power battery deal signals deeper EV supply-chain ties

Cornex

Cornex–Dongfeng power battery deal anchors five-year growth for both firms. The Cornex–Dongfeng power battery deal covers over 30GWh of supply. Therefore, the Cornex–Dongfeng power battery deal strengthens downstream EV launches and commercial fleets.

China’s battery demand keeps accelerating on EV and storage growth. Cornex will also expand R&D cooperation with Dongfeng Liuzhou. As a result, the partners can tailor pack designs and logistics. They did not disclose prices or delivery cadence.

Upstream security: LFP cathode and copper foil locked in

Cornex moved early to secure key feedstocks this year. It signed 150,000t of LFP cathode with Jiangsu Lopal in May. It added 152,000t of LFP from EVE Energy in June. It also secured 160,000t of copper foil from Nuode over five years. Consequently, the cell maker reduces cost volatility and quality risk across its lines.

Meanwhile, China’s battery ecosystem continues to scale. Power battery output reached 831.1GWh in January–July. Installed volumes hit 355.4GWh over the same period. Year-on-year growth was 58% and 45%, respectively. Those tailwinds support OEM ramp schedules and fleet electrification.

Market position: modest share, rising trajectory

Cornex installed 2.42GWh of LFP packs in January–July. That equals 0.7% of China’s installed base. However, it remains a top-15 domestic LFP installer. Therefore, the Dongfeng anchor order could accelerate share gains. R&D collaboration should compress qualification timelines and improve pack energy density.

Dongfeng plans passenger and commercial EV expansion. Cornex’s secured materials and new contracts improve delivery certainty. As a result, both sides can plan platform roadmaps with clearer cost curves.

The Metalnomist Commentary

Anchor agreements matter most when paired with upstream hedges. Cornex’s cathode and copper-foil locks de-risk this award and future bids. Watch how quickly the pair converts framework supply into model-specific SOP schedules and sustained monthly GWh.

Hubei STR anode recycling plant will start in March 2026 as China’s battery scrap accelerates

Lithium-Ion Battery

Hubei STR will start the Hubei STR anode recycling plant in March 2026. The project targets 50,000 t/yr of recycled anode materials for lithium-ion batteries. The company began site construction in January 2022. As a result, the facility enters the market as battery recycling volumes rise sharply.

Battery scrap volumes will surge as China’s first NEV wave reaches end-of-life. Lithium-ion batteries usually retire when capacity falls to 80%. The US Advanced Battery Consortium links this threshold to an 8–12 year service life. Therefore, post-2025 retirements should expand the available feedstock for anode material recycling.

China’s EV scale is turning recycling into a supply chain priority

China’s EV scale is making the Hubei STR anode recycling plant strategically timed. China pushed NEV output above one million units in 2018. NEVs reached 40.9% of total auto sales in 2024. Meanwhile, October NEV sales hit 1.72mn units and took 51.6% market share.

Recycling capacity must follow that growth curve. China Association of Automobile Manufacturers forecasts NEV sales near 16mn units in 2025, up from 12.86mn in 2024. China Automotive Engineering Society estimates retired power batteries exceeded 580,000t in 2023. It expects retirements to reach 6mn t by 2030. Consequently, anode recycling becomes a cost, ESG, and security lever for battery makers.

Graphite recovery and copper foil separation define the value capture

Graphite recovery drives much of the anode recycling economics. The lithium-ion battery recycling process starts with dismantling and material separation. Recyclers can recover plastics and the diaphragm from anode-side components. They can also extract aluminium foil from cathode materials.

Graphite recovery then becomes the key upgrade step. Recyclers separate graphite from copper foil in spent anodes. They purify the graphite and sell it back into the battery materials chain. Therefore, the Hubei STR anode recycling plant can support a more circular anode supply. It can also reduce exposure to price swings in battery-grade inputs.

The Metalnomist Commentary

China’s recycling race is shifting from metals recovery to materials performance. Therefore, graphite purity and consistent output will decide who wins long-term contracts. However, recyclers must prove traceability and ESG compliance to unlock premium pricing.

Cornex-Shanshan Battery Anode Deal Signals Aggressive EV Supply Chain Securing

Cornex

The Cornex-Shanshan battery anode deal locks in critical anode supply for fast growth. The agreement is worth over 10bn yuan ($1.39bn). The firms did not disclose volumes or tenor. The Cornex-Shanshan battery anode deal follows Cornex’s rapid feedstock contracting. Therefore, it strengthens cell output visibility in a volatile market. The Cornex-Shanshan battery anode deal also consolidates Yunnan-to-coastal anode logistics advantages.

Strategic supply and capacity signals

Shanshan increased anode output to 354,605t in 2024, up 27% year over year. Sales reached 339,536t, up 28% from 2023. Therefore, Shanshan can support large, multi-year awards. Cornex also secured cathode and foil inputs this year. It booked 150,000t LFP from Jiangsu Lopal in May. It added 152,000t LFP from Eve Energy in June. In July, it locked 160,000t copper foil from Nuode over five years. Consequently, Cornex de-risks key battery bill-of-materials.

Implications for feedstock, pricing, and EV supply chains

This contract tightens premium graphite and silicon-blend availability. However, scale should improve Cornex’s unit costs and yields. Downstream EV and storage demand continues to expand. Metalnomist sees EV sales reaching 60mn by 2035. The CAGR from 2025 is 12%, supporting anode expansion. Therefore, stable offtakes will matter for financing and capacity ramps. Banks and OEMs will seek transparency on pricing formulas.

The Metalnomist Commentary

This tie-up prioritizes supply certainty over perfect price timing. Expect further vertical coordination across cathode, anode, and foil. Watch qualification timelines and cost pass-through mechanisms into 2026 contracts.

Aluminum Four-Year High Signals Rising Energy and Metals Market Stress

Aluminum Bar

Aluminum four-year high became the clearest metals market signal on Monday as Middle East tensions intensified. LME three-month aluminum rose 2.5pc to $3,571/t, its highest level since March 2022. Rising oil prices and supply concerns pushed traders back into the market. As a result, aluminum four-year high now reflects both physical stress and geopolitical fear.

This matters because aluminum is highly exposed to energy costs and regional supply disruption. Brent crude moved back above $100/bl after the US announced a naval blockade of Iranian ports. Around 20pc of global oil and LNG supply passes through Hormuz. Therefore, LME aluminum prices are now reacting to energy risk as much as metal fundamentals.

The move also comes with visible stock changes. On-warrant aluminum inventories in LME warehouses jumped by a third to 354,450t after nearly 90,000t was rewarranted. That likely reflects traders repositioning physical units ahead of tighter conditions. Consequently, aluminum four-year high is being reinforced by both sentiment and inventory behavior.

Oil-Driven Metal Rally Is Lifting Copper and Nickel Too

Oil-driven metal rally is not limited to aluminum. Three-month copper rose 1pc to $12,855/t, while the next active Comex copper contract climbed 1.8pc to $5.99/lb. Three-month nickel also gained 2.6pc to $17,650/t. As a result, Middle East metals market risk is now lifting the broader complex.

Copper has its own support as well. Chinese smelters raised refined copper output in the first quarter by more than 7pc on the year. Higher sulphuric acid byproduct prices helped offset collapsing treatment and refining charges. Therefore, copper is being supported by both financial momentum and resilient Chinese production.

Nickel also benefited from the wider risk-on move in metals. Lead and zinc were almost unchanged, while tin was the only base metal to fall on the day. That contrast shows the market is rewarding metals with stronger geopolitical and speculative sensitivity. Meanwhile, aluminum remains the strongest headline performer.

Demand Signals Still Look Mixed Beneath the Price Rally

Demand signals remain mixed even as prices rise. Japan’s primary aluminum imports fell 3.4pc year on year and 16.8pc month on month in February. Local shipments of extrusions, flat rolled products, and foil also declined. Therefore, the aluminum four-year high is not being driven by strong downstream demand.

This divergence matters for the next phase of the market. Prices are rising because energy insecurity and supply risk are dominating near-term trade. However, weak physical demand in some regions may limit how far the rally can run without new disruption. As a result, Middle East metals market risk is overpowering softer industrial demand for now.

The Metalnomist Commentary

This rally is telling the market one clear thing: energy shocks still move metals fast. Aluminum is leading because it sits closest to power costs and regional supply risk. If oil stays above $100 and Hormuz remains unstable, the metals complex may keep pricing geopolitics ahead of demand fundamentals.

NETC LFP battery plant launches in Gansu to scale China’s energy storage supply

NETC

The NETC LFP battery plant has broken ground in Lanzhou, Gansu. The NETC LFP battery plant will add 30 GWh/yr in three phases. The NETC LFP battery plant targets fast-growing grid storage and EV demand in China.

Phase-by-phase build and product mix

NETC will invest 9bn yuan to build the facility. The first phase installs four LFP lines for energy storage cells. Two lines are 314Ah, and two lines are 30Ah. Further details for later phases were not disclosed. The staged approach limits execution risk and enables faster revenue.

China’s LFP dominance and NETC’s footprint

China produced 831.1 GWh of batteries in January–July. LFP held 79% of Chinese output over that period. LFP also neared half of global EV batteries in 2024. NETC is expanding on multiple fronts to ride this trend. It is building a 10 GWh plant in Anqing. It is also constructing a 21 GWh plant in Chuzhou. Seven GWh of the Chuzhou capacity is already online.

The Metalnomist Commentary

NETC’s Lanzhou build strengthens western China’s battery corridor. The cell formats signal a storage-led ramp, with automotive optionality. Watch procurement for lithium salts, iron phosphate, and copper foil as lines come online.

China Battery Overcapacity Crackdown Targets Price Wars and Overseas Expansion

China Battery

China battery overcapacity concerns deepened after government authorities held another meeting with leading power and energy storage battery producers on 9 April. The meeting signalled stronger regulatory pressure on disorderly competition, low-price strategies and excessive capacity expansion in the lithium battery sector.

The meeting brought together 16 major battery producers and several industry associations. It was the second such regulatory session since January, showing that Beijing sees battery overcapacity as a structural industrial risk rather than a short-term market adjustment.

China battery overcapacity has grown as domestic and overseas capacity plans have moved far ahead of actual demand. Regulators are now seeking capacity early-warning mechanisms, stronger market-order controls and tighter oversight of aggressive price competition.

Regulators Target Involution-Style Competition

Chinese authorities said the meeting aimed to implement senior government directives against “involution-style” competition. This term refers to excessive internal rivalry that destroys margins, weakens investment discipline and creates unsustainable price wars.

Regulators also discussed a negative list of irrational competitive practices in the power and energy storage battery industry. This would give authorities a clearer tool to identify and restrict behaviour that destabilises the market.

The new focus on the “externalisation of involution” is especially important. It shows that Beijing is now concerned not only about domestic overcapacity, but also about excessive overseas expansion by Chinese battery producers.

Chinese battery companies have accelerated global plant construction to serve overseas demand and reduce exposure to geopolitical restrictions. But if too much capacity is exported abroad, price pressure could spread into global power battery and energy storage markets.

Capacity Mismatch Creates Pressure Across Battery Materials

China’s power and energy storage battery output reached 1,755.6GWh in 2025, up 60.1% from a year earlier. Sales rose by 63.6% to 1,700.5GWh, confirming strong demand growth but also exposing the scale of capacity pressure.

Planned national capacity has climbed close to 5,000GWh. That implies utilisation rates below 40%, which helps explain why regulators are concerned about price wars and weak production discipline.

The issue also matters for battery materials. Overcapacity can pressure cathode active materials, precursors, lithium carbonate, graphite, copper foil, separators and electrolytes if producers chase volumes rather than margins.

Chinese battery firms are also becoming more important abroad. CATL, BYD, Gotion High-Tech, Farasis Energy, SVOLT Energy and CALB recorded 218GWh of overseas power battery installations in 2025, accounting for 47.2% of the global market.

The Metalnomist Commentary

China’s battery crackdown shows that scale alone is no longer enough. The next phase of battery competition will reward disciplined capacity, stronger technology, regional supply-chain positioning and healthier margins over pure volume growth.