Sichuan Jinyuansheng New Energy project, with a total investment of 4.23 billion yuan, aims to produce 100,000 tons of special ferric phosphate and 100,000 tons of special lithium iron phosphate per year

Thread Content

Currently, the lithium iron phosphate industry is reaching a turning point in terms of supply and demand as well as profitability. The industry’s operational rate rose from moderate to low levels in mid-2025 to high levels by the end of the year; leading companies operated at full capacity, and their profits reached a cyclical turning point, marking the start of a new round of expansion projects for lithium-iron batteries. Recently, the Sichuan Provincial Development and Reform Commission issued its review opinions on the \"Report on the Evaluation of the Energy-Saving Measures for the Project Producing 100,000 tons of special ferric phosphate and 100,000 tons of special lithium iron phosphate per year,\" and approved the energy-saving report for this project in principle. This project was invested and constructed by Sichuan Jinyuansheng New Energy Materials Co., Ltd., with a total investment of 4.23 billion yuan. It is located in the Ganmei Industrial Park in Meishan City and will be built in two phases. In the first phase, 2 flexible production lines plus 1 pilot line will be built, resulting in a flexible production capacity of 10,000 tons per year ； Phase 2 will involve the construction of 9 production lines, resulting in an overall annual production capacity of 100,000 tons. The iron powder method and high-temperature solid-state method are employed, and the production lines can be flexibly switched between the production of iron phosphate and lithium iron phosphate. The establishment of Sichuan Jinyuansheng’s 100,000-ton lithium iron phosphate production facility in Sichuan is not only a strategic decision by the Jinyuansheng Group to expand its presence in the lithium battery industry and strengthen its integrated operations, but it also represents an important achievement in the efforts to develop and strengthen Sichuan’s lithium battery industry chain. Today, thanks to its abundant resource reserves, favorable geographical location, and policy support, Sichuan is becoming an excellent location for lithium battery projects. Meishan in Sichuan is the core of the Chengdu-Chongqing new energy and new materials manufacturing hub, focusing on the lithium battery industry cluster worth hundreds of billions. The Ganmei Industrial Park boasts complete chemical and energy infrastructure as well as policy support. Sichuan is rich in lithium mineral resources, and its phosphate reserves rank among the highest in the country; the project can obtain lithium and phosphate raw materials locally, thereby reducing logistics costs ； It takes advantage of the policies aimed at the development of the western region as well as those supporting industries in the Chengdu-Chongqing twin-city economic zone, offering significant benefits in terms of electricity costs, land availability, and taxes – all of which meet the needs of Jin Yuan Sheng for resource integration and capacity expansion. Meanwhile, Jinyuansheng Group has previously established operations in the Ganmei Industrial Park for producing nickel-cobalt-manganese base materials and cobalt tetraoxide, thereby forming the initial framework of an industrial chain that spans from nickel-cobalt minerals to cobalt salts/cobalt oxides, precursors, and cathode materials. The lithium iron phosphate project represents a crucial step in enhancing its portfolio of cathode materials and enabling the simultaneous use of both ternary compounds and lithium iron phosphate, filling the gap in the group’s production capacity in the field of phosphate-based cathode materials. It is worth noting that Sichuan Jinyuansheng is a wholly-owned subsidiary of Shanghai Jinyuansheng, with the ultimate controller being Liang Feng, the chairman of Putailai. Currently, Putailai has become a leading enterprise in the field of graphite anode materials as well as a pioneer in diaphragm coating processing. Its current production capacity for anode materials is 200,000 tons, while the annual processing volume (sales volume) of diaphragms amounts to 7.003 billion square meters. Jinyuansheng possesses 1.7 million tons of copper reserves and 200,000 tons of cobalt reserves, and controls 2 million tons of laterite nickel ore resources. It has established an industrial chain that spans \"nickel-cobalt minerals – cobalt salts/cobalt oxides – precursors – cathode materials\". Thus, Jinyuansheng and Putailai have formed a collaborative lithium battery materials ecosystem comprising \"minerals + cathodes + anodes + separators\". Once the production capacity of this project is activated, it can share customer resources, technical research and development capabilities, as well as the supply chain system with Putailai, thereby providing comprehensive material solutions to downstream battery manufacturers and enhancing their overall competitiveness. At the same time, through industrial collaboration, research and development, production, and sales costs are reduced, achieving a \"1+1>2\" effect and strengthening the competitive advantage in the field of lithium battery materials. Between 2025 and 2026, the global lithium iron phosphate industry is entering a critical period of adjustment characterized by overcapacity and structural optimization. On the one hand, the previous large-scale expansion of production in this industry has led to an overcapacity in the low-end segment. By the end of 2025, the global effective production capacity for lithium iron phosphate is expected to exceed 8 million tons, while the actual demand is around 5 million tons, resulting in a capacity utilization rate of only about 60%. Companies with outdated technology and high costs have withdrawn from the market, and market orders are increasingly concentrated among the leading companies. On the other hand, there is a structural shortage in the production capacity of high-end lithium iron phosphate; products of this type that feature high compactness, long cycle life, and are suitable for use in energy storage and high-end power applications are in short supply. In early March 2026, the price of lithium iron phosphate for energy storage purposes was between 53,250 and 57,800 yuan per ton, while that for power applications was between 55,400 and 61,700 yuan per ton. These prices represented a increase of over 10% compared to the end of 2025. Processing fees continued to rise, marking a \"price increase period\" for this industry. This pattern of \"excess in the low-end segment and shortage in the high-end segment\" presents excellent market opportunities for Jinyuansheng’s special lithium iron phosphate project. The project focuses on high-end specialty products, avoiding price wars in the low-end market segment, and aligns with the industry’s trend of \"substitutional expansion\".