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.