(Yicai Global) Oct. 18 -- Shares in Ganfeng Lithium advanced today after the Chinese lithium producer said it has signed a deal to supply Umicore, a Belgian developer of cathode materials used in electric car batteries, with lithium salts over the next five years.

Ganfeng Lithium’s share price [SHE:002460] closed up 5.63 percent today at CNY172.17 (USD27).

Ganfeng Lithium will provide battery-grade lithium carbonate and lithium hydroxide monohydrate, two key raw materials used to make battery cathode materials, to Umicore’s production plants in China and South Korea, from 2022 to 2026, the firm said on Oct. 15. The specific quantity will be determined by the the Brussels-based customer at the time and costings will be based on market prices, it added.

Surging demand for NEV batteries has caused the price of Ganfeng Lithium’s main products, lithium carbonate and lithium hydroxide, to double since December last year, according to commodity platform 100PPI.

As a result, Ganfeng Lithium’s net profit in the first three quarters could be as much as eight times what it was the same period last year at CNY2.6 billion (USD404 million), the Xinyu, southeastern Jiangxi province-based company said. Just under half of this, CNY1.1 billion, is likely to be from the third quarter alone, it added.

To keep up with demand the lithium producer has plans to quintuple its annual capacity of lithium carbonate by 2025 to 200,000 tons, the secretary of the board said in September.

Editor: Kim Taylor