Morgan Stanley: Demand Recovery Will Prevent Lithium Prices from Falling in the Second Quarter

A major provincial project — the renewable-energy hydrogen production and liquefaction plant in Kangbao County, Zhangjiakou, Hebei — has essentially completed civil works and equipment installation and is moving into commissioning, with first hydrogen output expected in August 2026. Located in Zhangji Town with a total investment of RMB 781 million, the plant will produce up to 12,000 tpa of green hydrogen, forming a key supply pillar for North China. It hosts China's first 10-tonne-per-day liquid hydrogen unit, tackling the core challenges of green hydrogen liquefaction and long-distance storage and transport. Drawing on 2.7GW of local wind-solar resources, the project closes the chain from renewable power generation through hydrogen production, liquefaction and multi-scenario application, and serves as the core feedstock source for the Kangbao–Caofeidian hydrogen pipeline, serving Beijing-Tianjin-Hebei markets including hydrogen metallurgy and green chemicals; Phase II is advancing in parallel.

Phase I of a million-tonne-class LFP (lithium iron phosphate) pyro-process project at the Bijie High-tech Zone is in its final sprint, with commissioning expected in August. Developed by the Guizhou subsidiary of a global top-tier cathode materials producer, the project represents a total investment of RMB 7.32 billion on 873 mu, with an overall plan of 1.04 million tpa of LFP cathode material in three phases — Phase I alone at 340,000 tpa — plus a parallel 520,000 tpa wet-process LFP precursor line. Full-capacity output is projected at roughly RMB 30 billion in annual revenue. The producer has separately announced plans to invest about RMB 4.30 billion in additional LFP precursor and cathode capacity, noting that as demand for fast-charging EV cells and large-capacity storage cells accelerates in 2026, the shortage of high-compaction LFP capacity may deepen further.

On August 7, the first products rolled off the line at the world's first integrated industrial park dedicated to long-duration energy storage (LDES), located in the Luxi New Area of Heze, Shandong, developed by a leading Chinese storage battery maker. With a total planned investment exceeding RMB 13 billion across the full chain and a site of roughly 1,200 mu, the park spans LFP storage cell manufacturing, module and system integration, new materials and upstream raw materials, targeting 30GWh of 1175Ah LDES cells and 20GWh of 6.25MWh systems at full capacity — over 70% earmarked for overseas markets. Equipped with the company's Gen-5 smart production lines, the site is the industry's first to break 15GWh per line, cutting per-GWh investment by 32%, labor input by 58% and manufacturing energy by 13%, while doubling production efficiency versus its Gen-4 plants. The debut 1175Ah cell offers over 11,000 cycles and energy density above 180Wh/kg, covering 4–8 hour LDES scenarios; the company's order book is already filled through 2027.