Summary

After the deep price correction of 2023–2024, China's four cornerstone lithium battery materials entered a simultaneous volume-and-price recovery in 2025. Cathode output value rebounded to approximately RMB 274.4 billion (+31% YoY), ending two consecutive years of decline. Full-year 2025 shipments: cathode ~5.03 million tonnes (+50%), anode ~2.92 million tonnes (+38%), electrolyte ~2.15 million tonnes (+41%), separator ~32.85 billion sqm (+44%). For reference, the 2024 trough posted combined output value of RMB 347.2 billion (–24.8%), with lithium carbonate falling to RMB 58,000–76,000/tonne in 2025 H1 before rebounding to ~RMB 100,000 by year-end; by late May 2026, spot prices had further risen to ~RMB 170,000–175,000/tonne.

Consolidation has accelerated the market-share concentration in category leaders. Hunan Yuneng (301358) shipped 1.137 million tonnes of phosphate cathode in FY2025 (+60% YoY; revenue RMB 34.6bn, +53%; net profit RMB 1.28bn, +115%), retaining the global LFP No. 1 rank for six consecutive years. BTR (835185) shipped ~595,000 tonnes of anode in 2025 (revenue ~RMB 16.9bn, +19%). Tianci Material (002709) sold 720,000 tonnes of electrolyte in FY2025 (revenue RMB 16.65bn, +33%; net profit RMB 1.36bn, +181%). SEMCORP (002812) shipped 12.8 billion sqm of separator (+46%), returning to profitability after a 2024 loss.

This report is updated through FY2025 annual reports and 2026 Q1 results. It covers: definitions and classification of all four materials; global competitive landscape including deep-dive profiles of Asahi Kasei, SK IE Technology, Mitsubishi Chemical, POSCO Future M, and Umicore; PEST macro-environment analysis (including EU Battery Regulation, CBAM, and US tariff impacts); China market size with FY2025 full-year shipment and output-value data; full supply-chain breakdown from lithium carbonate and LiPF6 to graphitisation; FY2025 financials for 16 key listed companies; six regional industrial cluster maps; LFP vs. ternary and dry-process vs. wet-process sub-segment analyses; technology roadmap through solid-state, sodium-ion, and silicon-carbon trajectories; risk matrix; and 2026–2030 shipment, price, and competitive structure forecasts.

Core conclusions: (1) Volume growth remains structurally solid, driven by EV penetration and the energy storage boom. (2) Price recovery depends on supply-side capacity shakeout, not technology disruption — all-solid-state batteries will not materially impact the four key materials before 2030. (3) The cycle winners are companies with the lowest cost curves, fastest technology iteration, and deepest customer relationships — the leading positions of Hunan Yuneng, BTR, Tianci Material, and SEMCORP will be further entrenched through this trough.

China's lithium battery industry rests on four cornerstone materials — cathode, anode, electrolyte, and separator. Together they determine how much energy a cell can store, how long it lasts, and whether it is safe. Cathode material is the most expensive, accounting for roughly 40% of total cell cost. The anode is largely a graphite business. The electrolyte is the lithium-ion highway. The separator — a film measured in microns — is the safety barrier between the two electrodes. China is the global battlefield for lithium battery materials: more than 80% of world production capacity sits in China, and across nearly every sub-segment, Chinese companies dominate the global top ten.

Yet the industry is in the middle of a price storm. Lithium carbonate has fallen from RMB 600,000 per tonne to RMB 70,000–80,000. LFP cathode prices have been cut in half. Anode prices have hit a historic low of roughly RMB 30,000 per tonne. Electrolyte prices broke through the floor of RMB 20,000 per tonne in late 2024. Combined output value of the four key materials reached RMB 347.2 billion in 2024 — nearly half the peak two years earlier. Volumes are rising — shipments of all four materials grew by more than 25% year-on-year — but the depth of price declines overwhelmed the volume gain, and total output value kept shrinking.

This is not a recession; it is a classic capacity-cycle correction: high profits → aggressive capacity expansion → oversupply → price declines → loss-driven shakeout. In 2024–2025, the four key materials are at the trough of this cycle. The other side of the trough is a reshaping of competitive structure — Hunan Yuneng (301358) holds its position as the global number-one LFP cathode producer with nearly 70,000 tonnes of shipments, BTR (835185) leads the anode segment with a 22.7% share, Tianci Material (002709) commands the global top spot in electrolyte with nearly 500,000 tonnes of output, and SEMCORP (002812) has held the number-one position in separator for seven consecutive years with 8.83 billion square metres shipped. The price war is wiping out smaller players while simultaneously deepening the moats of the leaders.

Chapter 1　Definitions, Classifications and Four-Material Overview

1.1　How Lithium-Ion Batteries Work

A lithium-ion battery operates by the intercalation and de-intercalation of lithium ions between positive and negative electrodes. During charging, lithium ions leave the cathode crystal lattice, cross the electrolyte, and embed into the anode material. During discharge, the process reverses — ions move from anode to cathode through the electrolyte while electrons do work through the external circuit. This cycle can repeat hundreds or thousands of times, which is the physical foundation for the high energy density and long cycle life of lithium batteries.

A complete lithium-ion cell consists of four key materials: cathode, anode, electrolyte, and separator. The performance ceiling of these four materials almost entirely determines the battery's energy density, rate capability, safety, and cycle life. They are therefore called the "four key materials" (四件套).

1.2　Classification by Battery Chemistry

Battery chemistry is primarily determined by the cathode material. There are currently four mainstream cathode routes:

  • Lithium Iron Phosphate (LFP): A compound of iron, phosphorus, and lithium with olivine crystal structure. Excellent thermal stability, cobalt- and nickel-free, low cost, long cycle life, and relatively modest energy density (~150–200 Wh/kg). LFP's share of China's power battery installed capacity exceeded 81.6% in 2024, making it the overwhelming mainstream.
  • Ternary Materials (NCM/NCA): Mixed oxides of nickel-cobalt-manganese (NCM) or nickel-cobalt-aluminium (NCA). High energy density (~200–300 Wh/kg), suitable for long-range passenger EVs, but with weaker thermal stability and higher cost than LFP. NCM/NCA installed capacity share fell to approximately 18.4% in 2024, and the structural shift toward LFP is ongoing.
  • Sodium-Ion Batteries (Na-ion): Use sodium ions as the charge carrier. Cathode materials include layered oxides or Prussian blue analogues. No lithium required, lower cost, but currently lower energy density than LFP, with superior low-temperature performance. China's Na-ion shipments are projected to exceed 10 GWh in 2026.
  • Solid-State Batteries: Solid electrolytes replace liquid electrolyte; cathode chemistry is unchanged. Higher safety ceiling and energy density potential. Semi-solid batteries (retaining 5%–15% liquid electrolyte) entered mass production in 2026; all-solid-state is targeting small-batch production by 2027–2030.

1.3　The Four Materials

1.3.1　Cathode — The Most Expensive Piece

Cathode material is the single largest cost component in lithium batteries, accounting for roughly 40% of total cell cost. Its properties determine both energy density and voltage platform. LFP's 3.2V platform and theoretical specific capacity of ~170 mAh/g have been the foundation for rapid growth in power and energy storage markets in recent years. NCM811 offers a theoretical capacity of ~200 mAh/g and higher energy density, but cobalt and nickel price swings feed directly into costs.

Cathode production typically involves co-precipitation (for ternary precursors) or solid-state sintering (for LFP), high-temperature calcination, and particle classification — all requiring precision equipment and process control. Advanced kilns and setter plates are a meaningful barrier to entry for leading producers.

1.3.2　Anode — The Graphite Business

Anode materials are primarily graphite, divided into natural and artificial graphite. China shipped 211.5 million tonnes of anode material in 2024, of which artificial graphite accounted for 181 million tonnes and natural graphite approximately 26 million tonnes. Artificial graphite uses petroleum coke or needle coke as feedstock, undergoes high-temperature graphitisation at ~2,800–3,000°C, and achieves specific capacity of ~360–370 mAh/g. Natural graphite is less expensive but has weaker rate capability and consistency; it is used in certain mid-to-low-end cells after surface treatment.

Silicon-based anodes (Si-C, Si-O) offer a theoretical capacity of ~3,579 mAh/g — nearly ten times that of graphite — but their 300% volume expansion during cycling causes particle cracking and rapid capacity fade. Commercial applications are currently limited to low-ratio silicon-carbon blends (1%–10%); full replacement of graphite awaits further technology development.

1.3.3　Electrolyte — The Lithium-Ion Highway

The electrolyte consists of three components: organic solvents (ethylene carbonate/dimethyl carbonate, etc.), a lithium salt (lithium hexafluorophosphate, LiPF6), and functional additives (VC, FEC, LiDFOB, etc.). It provides the ionic pathway for lithium-ion migration and contributes to the formation of the SEI film on electrode surfaces, which critically affects cycle life and safety.

LiPF6 is the dominant lithium salt today, although its high-temperature stability is limited; next-generation salts such as LiFSI and LiDFOB are penetrating the high-end market. Additive formulations are each company's core moat — using the same solvents and salts, different additive recipes can yield a twofold difference in battery cycle life.

1.3.4　Separator — The Thin Safety Barrier

The separator is the thinnest member of the four key materials, typically only 5–25 μm thick, but critically important: it physically isolates the two electrodes to prevent short circuits while allowing free passage of lithium ions. The mainstream material is polyethylene (PE) or polypropylene (PP) microporous membrane, produced by either wet-process or dry-process routes.

  • Wet-process separator: PE base film produced by extraction of plasticiser to form pores; uniform pore distribution, high strength, suited to high-end power batteries. SEMCORP and Shenguan are the leaders.
  • Dry-process separator: PP base film produced by uniaxial or biaxial stretching; lower process cost, suited to mid-to-low-end and energy storage batteries. Shenguan (Xinyuan Materials) and Sinoma are the leaders.

By 2024, Chinese companies captured 79.4% of global separator market share, with SEMCORP alone holding more than 30% worldwide.

1.4　Industry Chain Overview

The four key materials supply chain has three layers:

Upstream Raw Materials: Lithium carbonate/hydroxide (cathode feedstock, with prices collapsing from a peak of RMB 600,000/tonne in 2022 to RMB 70,000–100,000/tonne in late 2024); graphite/petroleum coke/needle coke (anode feedstock); LiPF6 (electrolyte core lithium salt); PE/PP resin (separator base film); cobalt, nickel, manganese (ternary cathode key metals).

Midstream Four Key Materials: Cathode, anode, electrolyte, and separator manufacturers — the core focus of this report.

Downstream Applications: Cell manufacturers (CATL, BYD, EVE, CALB, etc.); EV OEMs (Tesla, BYD, Volkswagen, GM, Geely, etc.); energy storage system integrators (Sungrow, Huawei Digital Energy, BYD Storage, CATL); overseas battery makers (LG Chem, Samsung SDI, SK On, Panasonic).

Chapter 2　Global Landscape and Overseas Competitors

2.1　Global Capacity Map: China's Dominant Position

China's commanding position in all four key material segments has been built over two decades of systematic investment, comprehensive upstream raw material supply, a deep engineering talent pool, and a complete equipment manufacturing ecosystem.

  • Cathode materials: China accounts for more than 85% of global production; LFP is virtually a Chinese monopoly
  • Anode materials: China holds 90%+ of global supply
  • Electrolyte: China holds 90%+ of global supply; Tianci Material alone is the world's largest producer
  • Separator: China holds 79.4% of global supply; SEMCORP's single-company share exceeds 30% worldwide

2.2　Overseas Competitors

Cathode: Japan and Korea focus on high-nickel NCM/NCA. Sumitomo Metal Mining (Japan) is Panasonic's NCA cathode partner for Tesla. POSCO Future M (Korea) serves LG Chem and Samsung SDI; it is accelerating North American cathode capacity in response to IRA compliance requirements. Umicore (Belgium) is Europe's only scaled cathode producer.

Anode: Showa Denko (Japan) and JFE Chemical have largely exited large-volume power battery competition and retreated to niche high-power applications. The global anode market is now effectively a Chinese-company domain.

Electrolyte: Mitsubishi Chemical (Japan) and UBE were early movers in electrolyte technology, but their scale is orders of magnitude smaller than Tianci Material. Korean players (ENF Technology, Dongwha) primarily supply domestic Korean cell makers.

Separator: Asahi Kasei (Japan) — the technology pioneer in wet-process separator with its Hipore brand — and SK IE Technology (Korea) retain the strongest overseas competitive positions. Asahi Kasei's separators remain highly regarded for high-end applications (Panasonic 2170/4680 cells for Tesla), but its capacity expansion pace has fallen far behind Chinese producers; its global share has dropped below 5%. SK IE Technology holds approximately 7%–10% globally and is building European capacity for IRA-aligned customers.

2.3　Geopolitics and Capacity Relocation

Since 2022, the US Inflation Reduction Act (IRA) has required EVs sold in North America to source key minerals and components from the US or US free-trade-agreement partners to qualify for tax credits. This is driving Chinese materials companies to build overseas capacity in Morocco, Hungary, the US, and Indonesia, and to pursue joint ventures with local battery makers to skirt the "Chinese-made" label.

Chapter 3　PEST Analysis

3.1　Policy: Dual-Carbon Goals and New Energy Strategy

China's "Dual-Carbon" targets — peak carbon emissions by 2030, carbon neutrality by 2060 — are the fundamental policy driver for four key material demand. EV penetration in China has risen from 5.8% in 2020 to over 40% in 2024 and may surpass 50% in 2025. Mandatory energy storage co-location requirements for new wind and solar projects (10%–20% of installed capacity) have created a second, independent growth pole for LFP cathode demand separate from the power battery market.

3.2　Economic: Cycle Downturn and Overseas Opportunities

The 2022–2024 price cycle has been severe: lithium carbonate peaked at RMB 600,000/tonne in 2022, triggering a profit boom and massive capacity build-out, before crashing to RMB 70,000–100,000/tonne in 2024, compressing margins across the industry. Overseas markets offer pricing premiums of 20%–40% above domestic levels, IRA tax credits for local production, and forex revenue improvements — creating strong economic incentives for the leading Chinese producers to accelerate overseas expansion.

3.3　Social: Consumer Acceptance and Carbon Footprint Pressure

EV consumer acceptance in China has accelerated dramatically, with the lithium battery's role shifting from a specialty technology to a commodity. Fast-charging infrastructure improvements have eliminated range anxiety as the dominant purchase barrier. The EU Battery Regulation — requiring carbon footprint declarations from 2025 and carbon footprint limits from 2027 — is imposing new compliance requirements on Chinese four key material suppliers regarding energy sourcing, production processes, and supply chain transparency.

3.4　Technology: Route Competition and Iteration Speed

LFP's 81.6% share of China's installed power battery capacity in 2024 (vs. ~40% in 2020) reflects one of the most rapid technology transitions in modern manufacturing history. Yet NCM/NCA remain irreplaceable for high-end long-range vehicles and certain overseas markets (BMW, Mercedes, Hyundai). Solid-state electrolytes, if commercially validated ahead of schedule, would fundamentally disrupt electrolyte demand curves — but industry consensus places large-scale solid-state commercialisation at 2030 or later.

Chapter 4　China Market Size and Price Trends

4.1　Overall: 2025 Marks Volume-and-Price Recovery

2024 (trough): Combined output value was RMB 347.2 billion, down 24.8% YoY for the second consecutive year (EVTank data). Volume grew 25%+, but price declines were more severe.

2025 (recovery): Shipments surged to new records. Cathode ~5.03 million tonnes (+50%), anode ~2.92 million tonnes (+38%), electrolyte ~2.15 million tonnes (+41%), separator ~32.85 billion sqm (+44%). Cathode output value rebounded to ~RMB 274.4 billion (+31%, EVTank/GGII). Lithium carbonate fell to ~RMB 58,000/tonne (H1 2025 trough), then recovered to ~RMB 100,000 by year-end; as of late May 2026 spot prices are ~RMB 170,000–175,000/tonne.

4.2　Cathode: 2025 Volume +50%, Output Value Rebounds

2024 (historical reference): Total shipments ~3.29–3.35 million tonnes (+33%). LFP ~2.42–2.46 million tonnes (+48%), NCM/NCA ~640,000 tonnes (–3.2%). Total cathode output value RMB 209.6 billion (–34.9%). LFP average price ~RMB 30,000–40,000/tonne. Six leading LFP producers collectively recorded losses of RMB 3.292 billion in 2024.

4.3　Anode: Volumes Up, Prices at Historic Lows

Anode shipments totalled 211.5 million tonnes, up ~26%. Artificial graphite averaged ~RMB 30,000/tonne in 2024, a historic low. Companies are accelerating overseas expansion to escape the domestic price war.

4.4　Electrolyte: Record Volumes, Prices Below the Floor

Electrolyte shipments reached 152.7 million tonnes, up 34.2%. Global electrolyte market value was approximately RMB 41 billion, down 21.5%. Average selling prices in China fell below RMB 20,000/tonne by December 2024 — a historic low.

4.5　Separator: High Growth but Compressed Margins

Separator shipments reached 22.75 billion square metres, up 28.6%. China accounted for 79.4% of global output. Wet-process separator averaged ~RMB 0.50–0.60/sqm, roughly half the 2022 peak. SEMCORP's scale advantages and Yuneng long-term supply agreements maintained the highest relative profitability among all four segments.

4.6　The Deep Logic of the Price Cycle

The synchronised price decline across all four key materials is ultimately a capital cycle correction. The 2020–2022 EV boom triggered a surge in expansion capex; new capacity commissioned in 2023–2024 far outpaced demand growth, inverting the supply-demand balance. This pattern — high margins → aggressive expansion → oversupply → price collapse → loss-driven shakeout → eventual consolidation — closely mirrors historical cycles in semiconductors, solar panels, and display panels. For the four key materials, 2024–2025 represents the trough phase. The pace and depth of shakeout will determine the shape of the 2026–2027 recovery.

Chapter 5　Supply Chain Deep Dive

5.1　Upstream Raw Materials

Lithium: Resources concentrated in South America's "Lithium Triangle" (60% of global reserves) and Australian spodumene mines (50% of global production). China holds ~25% of proven reserves (Qinghai salt lakes and Jiangxi mica). Lithium carbonate prices: peak RMB 600,000/tonne (Nov 2022) → RMB 70,000–100,000/tonne (late 2024), a decline of more than 80%.

Cobalt, Nickel, Manganese: Cobalt is critical for ternary cathodes; approximately 70% of global cobalt production comes from the Democratic Republic of Congo. Nickel (NCM811's key element) is largely sourced from Indonesia; Chinese companies (Huayou Cobalt, GEM) have made substantial investments there. The de-cobaltisation trend (more nickel, less cobalt) is central to high-nickel NCM development.

Graphite/Needle Coke: China holds approximately 65% of global natural graphite production. Artificial graphite production requires high-temperature graphitisation at 2,800–3,000°C — the most energy-intensive and highest-cost step in anode production (40%–50% of manufacturing cost). China has implemented graphite export controls since late 2023, adding friction to exports to Japan, Korea, Europe, and North America.

LiPF6 (Lithium Hexafluorophosphate): The dominant electrolyte lithium salt. LiPF6 prices collapsed from ~RMB 600,000/tonne (2021) to ~RMB 50,000–80,000/tonne (2024), a decline of more than 85%. Tianci Material's vertically integrated LiPF6 production is its defining structural advantage; Duofluoride (002407) and Yongtai Technology (002326) are the other key domestic suppliers.

PE/PP Resin: High-molecular-weight polyethylene (UHMWPE) for wet-process separator base films is partially imported from Japan and Korea; PP for dry-process separator is domestically abundant.

5.2　Midstream Cost Structure

In a standard LFP power cell (280Ah prismatic), raw material cost breakdown (2024 estimates):

  • Cathode (LFP): ~38%–42% of cell cost
  • Anode (artificial graphite): ~12%–15%
  • Electrolyte: ~8%–10%
  • Separator: ~8%–12%
  • Copper/aluminium foil (current collector): ~8%–10%
  • Case/tabs/other: ~15%–20%

The four key materials combined account for ~65%–75% of cell cost — making them the primary determinant of cell manufacturing competitiveness.

5.3　Downstream Demand

Power batteries: China's power battery installed capacity exceeded 400 GWh in 2024. Export shipments are increasingly supplying LG Chem, Samsung SDI, SK On, and Panasonic's overseas production bases.

Energy storage batteries: China's energy storage battery shipments surpassed 250 GWh in 2024, growing faster than power batteries and emerging as a new demand engine — particularly for large-format LFP cells (280Ah, 314Ah, 587Ah).

Consumer electronics: Smartphones, laptops, TWS earbuds, and power tools use primarily cobalt lithium oxide and NCM; market size is one order of magnitude smaller than power/storage, with relatively stable volumes.

Chapter 6　Major Companies

6.1　Cathode Cathodes

Hunan Yuneng (301358) — Global LFP shipment leader for six consecutive years. FY2025: revenue RMB 34.625 billion (+53.22%), net profit RMB 1.277 billion (+115.18%), phosphate cathode shipments 1.1371 million tonnes (+60.03%). 2024 reference: revenue ~RMB 28.5 billion (–31%), net profit ~RMB 850 million (–46%), shipments ~700,000 tonnes. Scale efficiencies (large kiln amortisation) and partial upstream integration (iron phosphate) are key advantages.

Dynanonic (300769) — Unique liquid-phase (hydrothermal) LFP synthesis process. Incurred losses throughout 2024–2025 H1; however, 2025 H2 expected to achieve single-quarter breakeven. LMFP capacity of 110,000 tonnes/year (largest in China) now in production; first-generation product in mass shipment, second-generation in validation. Targeting 280,000 tonnes full-year shipment in 2025 (+20%+).

Ronbay Technology (688005) — China's NCM cathode shipment leader at ~20% global share for four consecutive years. 2024 revenue RMB 15.09 billion (–33.4%), net profit RMB 296 million (–49%). FY2025 recovery: 2026Q1 revenue RMB 4.526 billion (+137%), net profit RMB 277 million (+150%). LMFP shipments grew >100% in 2024, maintaining No. 1 market share in LMFP for two consecutive years.

Dynanonic (300073) — Veteran NCM producer covering NCM523/622/811; has supplied SK On and Panasonic, making it one of the few Chinese NCM makers with established Japanese and Korean customer relationships.

6.2　Anode Materials

BTR (835185) — Global anode shipment leader. FY2025: total shipments ~595,000 tonnes (industry #1, significant YoY increase), revenue ~RMB 16.9 billion (+19.3%), net profit ~RMB 899 million (–3.3% YoY, artificial graphite price pressure offset by silicon-anode premium). Silicon-carbon anode shipments ~5,000–8,000 tonnes to CATL and Panasonic/Tesla. Finland factory on schedule for revenue contribution in 2026. 2024 reference: market share 22.74%, >200,000 tonnes.

Shanshan (600884) — FY2025: net profit RMB 40–60 million (returned to profitability after 2024 loss); 2025 shipments ~518,000 tonnes (industry #2). Graphitisation in low-tariff provinces (Inner Mongolia, Ningxia) provides 30–40% cost advantage. Morocco overseas capacity under construction.

Zhongke Electric (300035) — 2024: 92,000 tonnes (+52.86%), fastest growing among top producers. Graphitisation services provide additional revenue stream.

Putailai (603659) — FY2025: revenue RMB 15.71 billion (+16.8%), net profit RMB 2.36 billion (+98.1%), deliberately limiting low-price orders (shipments 143,000 tonnes, only +8% vs industry +38% average). Cross-segment: anode + dry-process separator (Zhuoqin) + coating equipment.

6.3　Electrolyte

Tianci Material (002709) — Global number-one electrolyte producer. FY2025: revenue RMB 16.65 billion (+33%), net profit RMB 1.36 billion (+181%), electrolyte sales 720,000 tonnes; outstanding orders ~RMB 40 billion. Vertically integrated LiPF6 production amplifies margin recovery. CATL is its largest customer. 2024 reference: ~500,000 tonnes, domestic share 31.6%.

Xinzhoubang / Capchem (300037) — Third-ranked (second excluding BYD internal supply). FY2025: revenue RMB 9.64 billion (+23%), net profit RMB 1.097 billion (+16%); battery chemicals revenue RMB 6.68 billion (+31%). Strong additive R&D (VC, FEC). Polish plant serves European market.

Duofluoride (002407) — Core fluoro-chemical business; LiPF6 is its key lithium battery product. Serves Tianci and Xinzhoubang as a raw material supplier while also self-producing some electrolyte.

6.4　Separator

SEMCORP (002812) — Global number-one separator producer for eight consecutive years. FY2025: revenue RMB 13.63 billion, net profit RMB 143 million (returned to profitability after 2024 loss of RMB 556 million), shipments 12.8 billion sqm (+46%), gross margin 18% (+11pp YoY). 2024 reference: 8.825 billion sqm (+42.33%), global share >30%.

Xingyuan Materials / Shenguan (300568) — FY2025: revenue RMB 4.125 billion (+16.5%), net profit RMB 36 million (thin margin under wet-process competition). Dry-process leader; ranking has now dropped to No. 3 in wet-process as Hebei Jiengli (private) overtook it in 2025.

Sinoma Science & Technology (002080) — State-owned background, wet-process separator, in the domestic top five. State financing advantages support expansion.

Chapter 7　Industrial Clusters

7.1　Cluster Landscape

The four key materials cluster map is shaped by three overlapping forces: local government industrial policy, upstream resource endowments, and downstream customer proximity. Six core regions — Hunan, Guizhou, Sichuan, Jiangsu, Fujian, and Shanghai/Suwan — form the backbone of China's lithium battery materials supply chain.

7.2　Hunan Changsha/Ningxiang — Cathode Material Hub

The Ningxiang Economic Development Zone is the densest concentration of lithium cathode materials producers in China. Yuneng, Dynanonic, Changyuan Lico, and BYD's Bangpu recycling subsidiary all have major operations here. Hunan province's strategic industrial incentives, proximity to Changsha's chemical supply chain and logistics, and CATL's Hunan production plans create a self-reinforcing cluster effect.

7.3　Guizhou Zunyi — Phosphate Resource Advantage

Guizhou holds China's largest phosphate rock reserves (Kaiyangphosphate mine, etc.), providing a domestic supply base for iron phosphate — a key LFP cathode precursor. Anda Technology (830809) has deepened its roots in Zunyi over many years, building from phospho-chemical manufacturing up into LFP cathode production — a resource-to-materials upgrade story. As iron phosphate prices track LFP downward, the value of this resource advantage has been compressed.

7.4　Sichuan Yibin — Battery and Materials Integration

Yibin, anchored by CATL's Sichuan base (100+ GWh annual capacity), has attracted a complete ecosystem of cathode, anode, electrolyte, and separator producers for nearby supply. Low hydroelectric power tariffs (~RMB 0.25–0.30/kWh) make Yibin attractive for energy-intensive graphitisation operations.

7.5　Jiangsu Changzhou — Anode and EV Dual Hub

Changzhou is one of China's largest EV production cities (NIO, BYD facilities). This demand concentration has anchored anode producers (Zhongke Electric, Putailai) and a range of electrolyte and separator supporting suppliers. The Yangtze River Delta's logistics efficiency and industrial cooperation networks are a structural advantage.

7.6　Fujian Ningde — Global Battery Manufacturing Centre

Ningde — CATL's home and largest production base — has drawn dozens of four key material companies into the city and surrounding Mindong region for proximity supply. Provincial government support has turned the Ningde New Energy Industrial Park into one of China's fastest-growing battery material clusters.

7.7　Shanghai/Suwan — Separator Technology Hub

Shanghai SEMCORP hosts SEMCORP's core wet-process separator R&D centre and high-end production lines. UHMWPE raw material import infrastructure (port access), precision equipment suppliers, and testing institutions in Shanghai make it the leading separator innovation node. Suzhou and Anhui act as manufacturing satellites in a "technology in Shanghai, production in Suwan" spatial division of labour.

7.8　Tianxia Gongchang Perspective: Identifying the Supporting Factory Network

Behind the six cluster anchors lies an enormous network of smaller suppliers: iron phosphate precursor makers, graphitisation tollers, solvent recyclers, separator coating contractors, small-batch lithium salt suppliers, electrolyte additive specialists… These factories are the true infrastructure of the lithium battery supply chain, yet they are among the most difficult to identify accurately. In standard business registration data, they are often classified under broad "chemical industry" labels, with no reliable way to distinguish a genuinely operating lithium battery materials supplier from a dormant registration.

factory data platforms's industrial platform, which has verified and catalogued approximately 4.8 million genuinely operating factories across China, covers suppliers throughout the lithium battery materials upstream chain — from Inner Mongolia graphitisation processors and Guizhou iron phosphate precursor makers to Shanghai-area electrolyte additive specialists. This factory identification capability is precisely what enables accurate supplier discovery where conventional commercial database searches fall short.

Chapter 8　Sub-Segment Deep Dives

8.1　LFP vs. NCM: The Power Battery Route War

LFP's rise from roughly 40% of China's installed battery capacity in 2020 to 81.6% in 2024 represents one of the most decisive technology shifts in modern manufacturing history. The driver was CATL's CTP (cell-to-pack) innovation in 2020, which raised LFP pack energy density enough to close the gap with NCM to roughly 15%–20%, while preserving LFP's cost, safety, and cycle-life advantages. Tesla's 2021 Standard Range switch to LFP completed LFP's breakthrough into the premium market.

LFP's advantages are clear: superior thermal stability (olivine structure does not release oxygen at high temperatures, dramatically reducing thermal runaway risk), longer cycle life (3,000+ cycles vs. NCM's 1,500–2,000), lower cost (iron and phosphate are abundant; no cobalt), and resource security (no dependence on Congo cobalt or Indonesian nickel). NCM/NCA retain their niche in long-range premium EVs (700 km+), eVTOL aircraft, and performance vehicles where gravimetric energy density is a hard constraint.

Conclusion: LFP and NCM will coexist in a layered market. LFP's total share will stabilise at 75%–80% through 2030; NCM's absolute volumes will not collapse but its share will remain at 15%–25%.

8.2　Graphite vs. Silicon-Based Anode

Artificial graphite's theoretical capacity (~372 mAh/g) is near its ceiling; cell makers' energy density ambitions (350 Wh/kg targets) increasingly push up against this limit. Silicon-based anodes (theoretical ~3,579 mAh/g) offer the next step change, but three barriers constrain commercialisation: 300% volume expansion during cycling, unstable SEI film, and manufacturing cost ~RMB 100,000–300,000/tonne vs. ~RMB 30,000/tonne for artificial graphite. Current commercial deployment uses low-ratio silicon-carbon blends (1%–10%). Full-solid-state batteries, by accommodating silicon's expansion better with solid electrolyte, may eventually unlock higher silicon ratios. Road map: silicon-based anode content rises from ~3% (2024) to ~15%–20% (2030).

8.3　Electrolyte Additives: The Differentiation Battleground

The base electrolyte (solvents + LiPF6) is a commodity. What separates leading electrolyte companies is their additive formulations. Vinylene carbonate (VC) — the classic SEI-forming additive for stable cycle performance — and fluoroethylene carbonate (FEC) — superior for silicon-based anodes — are the two most commercially important additives. LiDFOB provides both film-forming and conductivity enhancement; high-voltage additives (PS, DTD) widen the electrochemical stability window for 4.35V+ cell designs. Additive recipe know-how, co-developed with cell maker customers over years, creates exceptionally high switching costs — once certified, supplier relationships are extremely sticky.

8.4　Dry-Process vs. Wet-Process Separator

Dry-process: PP base film, lower cost and capital requirement, wider pore size distribution, suited to energy storage batteries and lower-end power cells. Dry-process separator staged a 20%+ price increase in early 2025 as energy storage demand surged; Shenguan Materials was the primary beneficiary.

Wet-process: PE (UHMWPE) base film, extraction-formed pores, thinner and more uniform, suited to high-energy-density power cells and cylindrical batteries. Single wet-process production line capex: RMB 500–800 million. SEMCORP and Shenguan dominate.

2024 split: wet-process 174.9 billion sqm (77%), dry-process 52.6 billion sqm (23%). Wet-process penetration has risen from ~65% in 2017 as high-end power battery demand has grown. Neither technology will eliminate the other; the split will stabilise with wet-process at 70%–75% and dry-process at 25%–30% through 2030.

Ceramic (Al₂O₃/BN) and PVDF coating layers — applied on top of either base film — are becoming standard for high-end power applications, improving thermal resistance and electrode adhesion, and providing revenue and margin upside for both SEMCORP and Shenguan.

Chapter 9　Technology Trends

9.1　High-Nickel Cathode: The Ternary Energy Density Pursuit

NCM technology evolves along a trajectory of rising nickel content: NCM523 → NCM622 → NCM811 → NCMA/NCA (90%+ nickel). Higher nickel means higher capacity (~200 mAh/g for NCM811 vs. ~160 mAh/g for NCM523) but weaker thermal stability, more surface residual alkali, and more demanding sintering conditions. Ronbay and Dynanonic lead domestic NCM811 mass production; NCMA (aluminium-doped) is the next technology step for 4680 cylindrical applications.

9.2　High-Voltage Cathode: LFP and NCM Converging

Raising the charging cut-off voltage of LFP from 3.65V to 3.75–3.80V via optimised electrolyte formulations can increase capacity by ~5%–8%. LMFP (lithium manganese iron phosphate) replaces part of the iron with manganese, lifting the voltage platform from 3.2V to 3.7–3.8V and improving capacity by ~10%–15%; CATL's M3P battery (based on LMFP) entered vehicle production in 2024. For NCM, raising the cut-off voltage from 4.2V to 4.35V or 4.45V requires high-voltage-stable electrolyte, creating premium product opportunities for Tianci and Xinzhoubang.

9.3　Semi-Solid Batteries: 2026 Mass Production

Semi-solid batteries retain 5%–15% liquid electrolyte alongside solid electrolyte layers. NIO's 150 kWh semi-solid pack (360 Wh/kg) entered small-batch delivery in 2024; CATL and SAIC's collaborative "solid-state" vehicle targets 2026 mass production. Projected 2026 installation: 82 GWh. Impact on four key materials: liquid electrolyte demand falls by 80%–95% per cell; gradual rather than sudden displacement over 2026–2028.

9.4　All-Solid-State Batteries: Post-2030 Disruptor

All-solid-state batteries eliminate liquid electrolyte entirely, enabling lithium metal anodes (theoretical 500+ Wh/kg) and eliminating flammable liquid. Toyota targets 2027–2028 volume production; CATL targets 2027 small-batch and 2030 scale. Three unresolved barriers: interface resistance at electrode-electrolyte boundary, complex manufacturing process conditions, and scale-up cost. Systemic displacement of liquid electrolyte before 2030 is unlikely; this is a 2030–2035 structural variable.

9.5　Sodium-Ion Batteries: Low-End Entry

Sodium-ion batteries require no lithium, with abundant and cheap raw materials. China's Na-ion shipments are projected to exceed 10 GWh in 2026, primarily in sub-compact EVs (e.g., Baojun Yunduo), two-wheelers, and low-speed vehicles. CATL's first-generation NFPP cathode is in mass production; NFPP is projected to capture 80%+ of Na-ion cathode market share by 2026. Cell cost target: below RMB 0.40/Wh. At 10 GWh against a lithium battery market of 2,300+ GWh, Na-ion's near-term impact is limited (<0.5%); the 2028–2030 period may see more visible competition in energy storage.

9.6　Composite Current Collectors

Composite copper/aluminium foils — polymer film substrates metallised on both sides — reduce weight by 30%–50% vs. solid metal foils and improve safety (no sustained discharge after needle puncture). Baoming Technology, Shuangxing New Materials, and Nord Gold are representative domestic producers. Large-scale commercialisation and customer qualification are still underway in 2024–2025; meaningful displacement of conventional foils likely requires 2–3 more years.

Chapter 10　Risks and Challenges

10.1　Overcapacity: The Most Immediate Risk

LFP cathode nameplate capacity exceeded 6 million tonnes in 2024 against actual shipments of ~2.4 million tonnes — a utilisation rate below 40%. Anode, electrolyte, and separator face similarly elevated overcapacity. Shakeout paths include loss-driven small-producer exits (historically slow in China due to government and bank support), M&A consolidation (muted at current asset price levels), and overseas capacity transfer (Morocco, Hungary, Southeast Asia).

10.2　Price War: "Death Spiral" Risk

If the loss-making environment persists for 2–3 years, enterprises exhaust cash flows, cut R&D, and enter a cycle of ever-lower prices to maintain volumes. The solar and steel industries provide cautionary precedents: sustained price wars there lasted multiple years before large-scale capacity retirement and consolidation ended the cycle. The lithium battery four-material sector's shakeout is expected to require 1–2 more years.

10.3　Lithium Price Volatility

Lithium carbonate prices in the RMB 70,000–100,000/tonne range are at or below some producers' all-in costs, implying eventual supply-side contraction. A rebound to RMB 150,000–200,000/tonne in 2026–2027 is plausible; such a move would rapidly transmit to cathode material prices and restructure profit distribution across the supply chain — compressing cathode maker margins again while benefiting upstream lithium producers.

10.4　Overseas Trade Barriers

US IRA compliance requirements, EU tariffs and anti-subsidy investigations on Chinese EVs, China's graphite export controls, and the broader contest over critical mineral supply chains all add friction to Chinese four-material producers' overseas expansion strategies. The legal and compliance architecture for overseas market access is evolving rapidly, and managing this complexity is a growing operational challenge for every exporting producer.

10.5　Technology Route Risk

If all-solid-state battery commercialisation proves faster than consensus expects — e.g., Toyota's 2027–2028 target materialises at scale — electrolyte demand could face systemic decline and separator demand would also shrink. This is a tail risk for Tianci Material and SEMCORP; the industry consensus that pre-2030 large-scale solid-state commercialisation is unlikely reduces — but does not eliminate — this risk.

Chapter 11　2026–2030 Forecast

11.1　Overall Demand: The Growth Logic Remains Intact

  • 2025 baseline: China lithium battery output approximately 1.6–1.8 TWh; energy storage ~600–700 GWh (+35%+); NEV penetration exceeded 50%; lithium carbonate year-end ~RMB 100,000/tonne, rising further to ~RMB 170,000–175,000/tonne by May 2026
  • 2026: China lithium battery shipments exceed 2.3 TWh (up ~30% YoY); energy storage exceeds 850 GWh (up 35%+); EV exports approach 4 million units (up 50%+); 2026 lithium carbonate annual price consensus: RMB 100,000–150,000/tonne
  • 2030: Global lithium battery shipments reach 6,012 GWh (CAGR ~21.4%); China maintains 60%+ global share

11.2　Sub-Segment Forecasts

Cathode (2025 baseline: ~5.03 million tonnes): 2026 shipments ~6.0–6.5 million tonnes (+20–30% on 2025 base); 2030 ~900–1,100 million tonnes. LFP stable at 78%+ of total; LMFP from ~3 million tonnes in 2025 to ~8–15 million tonnes in 2026, reaching 10–15% penetration by 2030. LFP prices: 2025 ~RMB 40,000–50,000/tonne (achieved); 2026 ~RMB 50,000–70,000/tonne as lithium carbonate prices surpass RMB 170,000/tonne in May 2026. CR3 rising from ~50% to ~60%–65%.

Anode (2025 baseline: ~2.92 million tonnes): 2026 shipments ~360–400 million tonnes (+25–35% on 2025 base); 2030 ~550–650 million tonnes. Silicon-based anode from ~3–5% in 2025 to ~15–20% by 2030. Overseas revenue share rising from ~15% to 25%–30%.

Electrolyte (2025 baseline: ~2.15 million tonnes; Tianci net profit +181%): 2026 shipments ~250–280 million tonnes (+15–30% on 2025 base); 2030 ~380–430 million tonnes. Prices: 2025 ~RMB 25,000–30,000/tonne (partially achieved); 2026 ~RMB 30,000–40,000/tonne as lithium costs rise. Semi-solid battery penetration modest impact. CR3 sustained at 60%+.

Separator (2025 baseline: ~32.85 billion sqm; SEMCORP returned to profit): 2026 shipments ~39–43 billion sqm (+20–30% on 2025 base); 2030 ~550–650 billion sqm. Wet-process stable at 80%+; dry-process supported by energy storage. Coated separator ratio rising. CR3 from ~60% to ~65%–70%.

11.3　Competitive Consolidation Timeline

  • 2025 (completed): Peak pain phase largely completed; separator leader SEMCORP returned to profit; electrolyte leader Tianci net profit +181%; cathode leader Yuneng net profit +115%; anode (Shanshan, Putailai) dramatically improved earnings
  • 2026–2027: Supply rationalisation effect now showing; prices recovering across all four materials; leading firms restore profitability; M&A activity accelerates; LMFP begins meaningful scale-up
  • 2028–2030: Competitive structure resets; CR3 in all four segments reaches 60%+; overseas revenue share for leaders rises to 25%–35%; the industry enters a new sustained profitability cycle

Chapter 12　Conclusion

12.1　Three Threads for Reading the Four Key Materials

Three key threads run through this report.

Thread one: Concentration rising, the strong get stronger. Every four-material sub-segment shows CR3 above 50% and trending upward. The price war is eliminating smaller competitors while simultaneously deepening the structural advantages of the leaders. When the price war ends, the leading companies will have stronger moats than before it began.

Thread two: The trough is the window for triage and positioning. The 2024–2025 price bottom is revealing which companies truly possess cost advantages, technology depth, and customer stickiness. Tianci's LiPF6 integration, SEMCORP's scale efficiencies, BTR's silicon-carbon technology pipeline — these capabilities are invisible in a booming market but define winners at the trough.

Thread three: Overseas expansion and technology iteration are the two growth levers for 2026–2030. European and North American EV market penetration, plus semi-solid/solid-state/sodium-ion technology transitions, will provide price-mix improvement and new market capture opportunities beyond volume growth. Companies that achieve IRA-compliant overseas production and break through in high-voltage electrolyte and silicon-anode product lines will be the first to benefit when the next upcycle arrives.

12.2　Supply Chain Coordination: The Real Moat

The four key materials are not four independent products — they are a tightly coordinated system within a single cell. Cathode chemistry determines electrolyte formulation direction. Anode silicon/graphite ratios influence separator ionic flux design requirements. High-nickelisation's safety challenges simultaneously raise thermal requirements for both electrolyte and separator. This interdependence means the companies that truly break through are those capable of deep co-development with cell maker customers — embedded in the customer's product design loop, not merely quoting the lowest price.

Customer qualification cycles of 1–2 years mean switching costs are genuinely high. This is why the leading four-material producers can sustain customer relationships even while margins are under severe pressure — and why the industry retains a floor of profitability even in the deepest price war.

12.3　Tianxia Gongchang Perspective

Behind the four-material giants lies a much larger factory network. Every tonne of LFP cathode from Yuneng is upstream by iron phosphate precursor makers, lithium carbonate suppliers, sintering setter plate manufacturers, kiln equipment builders — suppliers distributed across Guizhou, Hunan, Jiangxi, and Jiangsu, each a fraction of the flagship's scale, yet every one essential to the supply chain's function.

factory data platforms's industrial platform has verified and catalogued approximately 4.8 million genuinely operating factories across China, covering the full supply chain from lithium salts and lithium carbonate to graphitisation processors, electrolyte solvents, separator base films, and cell casings. For procurement teams, sales forces, and investors operating in the lithium battery materials industry, accurately identifying genuinely operating suppliers within this network — from tens of thousands of broadly classified "chemical industry" registrations — is precisely the capability factory data platforms is built to provide.

12.4　Research Institute Judgement

The 2026–2030 story for China's four key lithium battery materials is not a simple "recovery" narrative — it is a maturation leap:

  • From the "everything rising together" high-cycle, to a mature competitive structure where the strong strengthen and the weak exit
  • From domestic-centred capacity, to a "domestic + overseas" globalised supply chain
  • From a mature system of liquid electrolyte and graphite anode, to a technological transition period with liquid and semi-solid coexisting, and graphite and silicon progressively blending

The next lithium carbonate price upcycle is not a distant speculation — it is the inevitable result of resource-side capacity contraction. When that upcycle arrives, the companies with the lowest cost curves, deepest technology reserves, and most durable customer relationships will be those that convert cycle momentum into real profit growth.

That is the question the four key material leaders are already answering, each in their own way. What remains is to wait for the cycle to turn.

Data Sources and Key References

This report was prepared by the Tianxia Gongchang Industry Research Institute based on factory and supply chain data from the Tianxia Gongchang industrial platform, combined with publicly available data, official sources, and authoritative media reporting. Key data and fact sources include:

  • factory data platforms industrial platform factory database and cluster data (www.tianxiagongchang.com)
  • EVTank (2024 annual reports on China's four major lithium battery materials)
  • GGII (Gaogong Industry Research, 2024 lithium battery materials shipment data)
  • SMM (Shanghai Metal Market, monthly lithium battery materials market data)
  • Annual and semi-annual reports of Hunan Yuneng (301358), Ronbay Technology (688005), Dynanonic (300073), BTR (835185), Shanshan (600884), Zhongke Electric (300035), Putailai (603659), Tianci Material (002709), Xinzhoubang (300037), Duofluoride (002407), SEMCORP (002812), Shenguan Materials (300568), Sinoma Science & Technology (002080)
  • National Energy Administration, "China New Energy Storage Development Report 2025"
  • Lianhe Credit Rating, Chengxin International Rating agency lithium battery industry analysis reports
  • Mordor Intelligence, IHS Markit international market research