(Yicai Global) July 19 -- Tonze Electric’s stock price failed to get a boost today from news that the Chinese home appliance maker had signed a long-term supply agreement with electric vehicle and power battery giant BYD.

Tonze Electric [SHE: 002759] ended more than 8 percent down today at CNY40.65 (USD6.27). The Shenzhen market closed flat. The shares have gained over six times in value since September, and reached a record high of CNY54.80 on July 14.

Tonze Electric will supply as much as 11,300 tons of lithium hexafluorophosphate, a main component of lithium battery electrolytes, to BYD over the next 2 and 1/2 years, the Shantou, Guangdong province-based firm said yesterday. Wholly owned unit Jiangsu Xintai Material Technology will carry out the project.

Supply has been set at 3,500 tons in about 1 and 1/2 years to the end of 2022, and that will jump to 3,600 to 7,800 tons for 2023. But the exact amount will be negotiated and determined by next year, it added. The statement did not mention any financial details.

With designated annual production of 8,160 tons, Xintai Material is one of the main suppliers of lithium hexafluorophosphate in China. It announced a capacity expansion plan in April to build a new plant with annual output of 10,000 tons, but did not disclose when it will go into production.

Lithium hexafluorophosphate is one of the main components of lithium battery electrolytes. It accounts for about 35 percent to 40 percent of the total cost of electrolytes.

The price of lithium hexafluorophosphate in the Chinese market has risen from around CNY70,000 (USD10,800) a ton last August to a high of CNY390,000 to CNY425,000 (USD60,00 to USD65,500) in early July, according to industry data.

The price of lithium hexafluorophosphate is generally expected to rise as tight supply conditions will continue until at least the first half of next year.

Editor: Peter Thomas