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).