(Yicai Global) April 19 -- LB Group’s shares inched higher after the leading Chinese supplier of titanium dioxide signed a four-year supply deal with ITG Group for lithium battery materials.

LB [SHE: 002601] closed 0.8 percent up at CNY21.01 (USD3.30) today, after earlier gaining as much as 2.2 percent. The broader Shenzhen market fell 0.5 percent.

LB will supply Xiamen-based ITG with 200,000 tons of iron phosphate, while ITG will supply 50,000 tons of lithium carbonate and other chemical materials to LB from through 2025, the Henan province-based company said late yesterday.

The pair will give each other a certain discount, based on the market price, LB added, without disclosing the contract prices.

Iron sulfate, a by-product of LB’s titanium dioxide plants, is a key material for making iron phosphate, creating a unique cost advantage to enter the lithium battery material field. LB said. It has published plans to build iron phosphate and lithium iron phosphate plants since last August.

The deal with ITG will guarantee stable and reliable downstream buyers for LB’s iron phosphate after the plants go into operation and ensure a stable supply of lithium carbonate for its lithium iron phosphate facilities under construction. Lithium carbonate and iron phosphate are key materials to make lithium iron phosphate.

Editor: Futura Costaglione