(Yicai Global) Aug. 3 -- Shanshan failed to get a boost today from the news that the Chinese battery materials supplier plans to build a CNY8 billion (USD1.5 billion) production base for anode materials as demand from lithium-ion battery makers grows.

Shanshan’s shares [SHA:600884] opened up 3.3 percent today, but ended almost 8 percent lower at CNY26.21 (USD4.05) each. The stock has gained about 110 percent since mid-April, and reached a record high CNY34.8 on July 16.

The new project is divided into two phases, each of which will be able to make 100,000 tons of anode materials, the Ningbo-based company said late yesterday. The phases will be completed within 16 months and 32 months, respectively.

The plant will be located in China’s southwestern Sichuan province, so the firm can tap plentiful hydro power supplies and effectively cut production costs, it said. Moreover, most freight trains to Europe depart from there, so Shanshan can better meet increasing European demand and boost its market share, it added.

Editor: Futura Costaglione