[MinRes Q2 2026 Lithium Update]

On July 28, the Yantai Municipal Ecology and Environment Bureau formally approved the Environmental Impact Assessment for Wanhua Chemical (Penglai) Co., Ltd.'s 240,000-tonne-per-year iron phosphate project. The project, located on reserved land in Phase II of the Wanhua Penglai Industrial Park, involves a total investment of RMB 1.5 billion. It will build a 240,000 t/y iron phosphate production unit along with supporting auxiliary facilities and environmental protection systems. The batching section operates on an intermittent basis, with 2,000 batches per year (one batch every four hours), each producing 120 tonnes of iron phosphate. The project will help alleviate raw material supply pressures driven by Wanhua’s rapidly expanding lithium iron phosphate (LFP) capacity in Shandong—where the company is set to add 820,000 tonnes of LFP capacity in 2026 alone, making Yantai a key LFP production hub.

The Weifang Municipal Ecology and Environment Bureau has recently published the public notice of the Environmental Impact Assessment acceptance for the "50,000 t/a Lithium Battery Material Recycling Project" of Weifang Chuanghai New Materials Co., Ltd. The project is located in the Changyi Longchi Chemical Industry Park, Weifang, Shandong, within the existing site of Haineng Chemical. It covers an area of 50 mu (approx. 3.3 hectares), and will be built after demolishing the existing hardware warehouse. New facilities including a production workshop, a comprehensive warehouse, a control room, and an electrical distribution room, totaling 9,000 square metres, will be constructed. The process involves acid leaching, filtration and impurity removal, iron phosphate synthesis, lithium precipitation and purification, and evaporation crystallisation of battery black mass, enabling comprehensive resource utilisation of spent lithium iron phosphate battery black mass. Upon completion, the project is expected to produce 8,000 tonnes of lithium carbonate, 10,000 tonnes of anhydrous iron phosphate, and 32,000 tonnes of dihydrate iron phosphate annually. The total investment is estimated at RMB 1.011 billion, with environmental protection investment of RMB 1 million, accounting for 0.1% of the total. The construction period is 6 months.

This week, the industry chain exhibited a diverging pattern, with upstream raw material and cobalt salt prices weakening while midstream and downstream material prices remained relatively stable. Trading in refined cobalt, intermediate products, cobalt sulphate, cobalt chloride, Co3O4, and cobalt powder was generally sluggish. Downstream buyers mostly maintained just-in-time procurement, as off-season demand was insufficient, and inventory pressure along with low-priced supply continued to weigh on market prices. Although some miners and smelters, supported by high-cost inventory, still intended to hold prices firm, traders and recycling companies became more active in selling, and the decline in the cost of refined cobalt reverse dissolution further strengthened market expectations of pushing for lower prices. In the short term, related product prices still face downward pressure. Ternary cathode precursor, ternary cathode material, and LCO prices remained stable overall. Leading ternary cathode precursor companies performed well in export orders, and domestic production schedules recovered somewhat, but small and medium-sized enterprises were still affected by the off-season. Demand for ternary cathode materials from the EV sector stayed at a high level; some battery cell enterprises stockpiled in advance, and August orders are expected to be stable with slight growth. Consumer-side demand remained mediocre. Affected by sluggish end-use demand and substitution by ternary cathode materials, LCO production and sales remained low, further narrowing enterprises' profit margins. Subsequent market recovery will still depend on the restocking pace in mid-to-late August and the release of demand during the September-October peak season.