(Yicai Global) Sept. 9 -- Shares of Do-Fluoride New Materials rose after the Chinese maker of inorganic fluoride products said it will invest CNY1 billion (USD155 million) to expand production of a key ingredient of electrolyte materials commonly used in lithium-ion batteries.

Do-Fluoride’s stock price [SHE:002407] finished 1.9 percent higher today at CNY53.58 (USD8.30), after earlier climbing by as much as 6.8 percent.

Do-Fluoride will build a new plant in the Yangquan High-tech Industrial Development Zone in Yangquan in China’s northern Shanxi province to meet strong demand amid surging prices for lithium hexafluorophosphate, the Henan-province based firm said in a statement late yesterday.

The price of lithium hexafluorophosphate, which makes up about 40 percent of the cost of lithium battery electrolytes, soared over four times this year to CNY450,000 (USD69,650) a ton as of yesterday.

The Yangquan project will have annual output of 20,000 tons of lithium hexafluorophosphate, as well as other additives for lithium-ion battery electrolyte. It will be divided in two phases, each to complete in 12 months and be operational by the end of next year and December 2024.

The company and Yangquan High-tech Industrial Development Zone's Administrative Commission will invest CNY180 million (USD27.8 million) and CNY20 million (USD3.1 million), respectively, to set up a project investment fund that will take a 16.7 percent stake.

Do-Fluoride is one of the main lithium hexafluorophosphate suppliers in China. One year ago it could only produce 8,000 tons of the electrolyte material, but amid strong demand the firm announced in July a CNY5.2 billion investment to build a new plant with annual output of 100,000 tons of lithium hexafluorophosphate and other chemicals for lithium-ion batteries.

China produced 21,320 tons of lithium hexafluorophosphate in the first half of this year, nearly the same amount as in 2019 and up 134 percent from the same period last year, per statistics from industry research and consulting firm Iccsino.

Editor: Futura Costaglione