On the evening of July 3, Tinci Materials announced the termination of its Nantong project for producing 243,000 tonnes per year of lithium battery and fluorinated new materials.
The project was first planned in 2021, with an initial capacity of 350,000 tonnes and an investment of 1.766 billion yuan. In 2022, it was revised to 243,000 tonnes, and the investment was increased to 2.654 billion yuan.
By the end of June 2026, however, the construction-in-progress book balance of the project stood at only 9.3613 million yuan, mainly spent on land levelling, fencing and road paving. Core production facilities had not actually been built.
The company cited three reasons for the termination:
- Its existing Liyang plant already has 200,000 tonnes of capacity, is located close to key customers, and still has room for technical upgrading and expansion within the current site, with much lower incremental costs than building new production lines.
- Concentrating capacity at existing bases enhances synergies in raw material procurement and by-product recovery.
- Production processes for fluorinated materials have evolved rapidly in recent years; continuing with the original plan would make it difficult for the products to remain competitive once they come to market.
Alongside the Nantong halt, the company reallocated approximately 406 million yuan of raised funds to a revamping and expansion project for 250,000 tonnes of electrolyte production in Fuding.
Specifically, Tinci redirected the remaining proceeds from its “Annual 41,000-tonne lithium battery materials project (Phase I)”—about 406 million yuan—to the Fuding Kexin “Annual 250,000-tonne electrolyte production revamping and expansion project,” which has a total investment of roughly 598 million yuan and an 18-month construction period.
This adjustment is backed by long-term supply agreements covering 2026 through 2030, which the company signed with core battery customers starting in the fourth quarter of 2025. The additional capacity therefore has clear downstream demand commitments.
Tinci’s own operating performance remains solid. In full-year 2025, revenue reached 16.65 billion yuan, up 33% year on year, while net profit attributable to shareholders was 1.362 billion yuan, a year-on-year increase of 181.43%. In the first quarter of 2026, net profit attributable to shareholders surged more than tenfold year on year. As of July 3, the company’s market capitalisation stood at about 110 billion yuan. The fact that it chose to halt a long-planned expansion project even while earnings are growing is worth noting.
Since the second half of 2023, the electrolyte industry has undergone a wave of concentrated capacity expansion, with both leading players and new entrants adding supply at the same time. Downstream demand growth, however, has failed to keep pace, resulting in a supply-demand mismatch and sustained price declines.
Tinci Materials has a self-supply rate of over 98% for lithium hexafluorophosphate (LiPF₆) and has built a vertically integrated structure spanning upstream lithium salts, electrolyte production and recycling, giving it one of the industry’s strongest cost-control capabilities.
Even so, the company has chosen to slow down inefficient capacity construction, concentrate resources at bases with comparative advantages, and lock in five-year demand through long-term agreements.
