According to Securities Daily, the market for lithium battery electrolyte additives is currently experiencing a comprehensive recovery. Prices for electrolyte additives such as vinyl carbonate (VC) and fluorinated ethylene carbonate (FEC) have risen in tandem, signaling the onset of a new prosperity cycle.

On November 18, executives from several listed companies in this sector told Securities Daily reporters that leading electrolyte additive manufacturers are operating near full capacity. This surge is primarily driven by rapidly growing demand for energy storage batteries and power batteries, coupled with macroeconomic policies and shifts in industry supply and demand.

VC, a core additive in lithium battery electrolytes, has recently experienced a sharp price increase.

In the lithium battery sector, VC additives are among the most critical functional additives in electrolytes, playing a decisive role in battery cycle life, safety, and high-temperature stability.

Recently, China's largest electrolyte additive company, Shandong Genyuan New Materials Co., Ltd. (hereinafter referred to as “Shandong Genyuan”), experienced sudden equipment failure. The company has officially initiated comprehensive maintenance and halted shipments. Shandong Genyuan's production halt has widened the short-term VC supply gap, driving a sharp price surge on November 12. VC was quoted at 77,500 yuan per ton that day, marking a 63% increase from the September 1 price of 47,500 yuan per ton.

In fact, prior to this surge, electrolyte additives like VC had maintained prices around ¥50,000/ton for nearly two years. Recently, driven by surging demand for energy storage boosting lithium iron phosphate battery production, coupled with no new industry capacity additions over the past three years, and small-to-medium manufacturers struggling to resume operations due to technical and environmental barriers—alongside production halts at leading companies—electrolyte additive prices have entered a new upward cycle.

VC production involves high-risk chemical processes (such as chlorination and fluorination reactions), subject to stringent environmental and safety approvals. Second- and third-tier manufacturers face significant challenges in expanding capacity, and VC restarting requires a ramp-up period exceeding three months, while new capacity construction cycles last up to one year.

According to research by Gaogong Industrial Energy Storage Research Institute, sustained high inventory levels in the energy storage sector indicate China's energy storage market shipments could grow over 50% year-on-year by 2025, exceeding 500GWh in scale. Continued growth in downstream demand for power batteries and energy storage batteries will drive long-term market demand for upstream electrolyte additives VC and FEC.

Amid rising prices and tight supply, leading companies in the industry are expanding production capacity leveraging their advantages in scale and technology.

Jiangxi Fuxiang is a top domestic electrolyte additive manufacturer. The company possesses extensive experience in chemical processes such as halogenation, material separation, and product purification involved in electrolyte additive production. It also operates multiple production bases that can be coordinated for joint operations. The company has established scaled production capacity of 8,000 tons of VC and 3,700 tons of FEC annually. Through continuous process optimization and equipment upgrades, it ranks among the industry leaders in both shipment volume and cost control for its lithium battery electrolyte additive VC products. In 2024, the company shipped 6,525 tons of lithium battery electrolyte additive products, marking a 28% year-on-year increase.

On November 17, during an institutional investor visit, the company stated: “We plan to increase VC production capacity to 10,000 tons/year through technical upgrades, with completion expected in Q2 2026. Subsequent capacity expansions for VC and FEC products to 20,000 tons/year and 5,000 tons/year, respectively, will be determined based on market demand and industry capacity releases.”

The rise in upstream raw material prices partly reflects the growing momentum in the new energy sector. From the demand perspective, the market still holds significant room for expansion in new energy requirements.

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