(Yicai Global) Aug. 3 -- Zhejiang Yongtai Technology’s shares surged by the exchange-imposed limit for a second day in a row after announcing a long-term deal to supply lithium battery electrolyte components to Contemporary Amperex Technology.

Yongtai Technology [SHE:002326] ended today up 9.8 percent at CNY27.34 (USD4.23), after earlier advancing by as much as the daily 10 percent limit. The stock also finished 10 percent higher yesterday.

The supply deal will last through 2026, with the Linhai-based company supplying CATL with three electrolyte component chemicals for electric vehicle batteries, including lithium hexafluorophosphate, according to the contract inked on July 31, Yongtai said yesterday.

The minimum order for lithium hexafluorophosphate, the main component of lithium battery electrolyte, is set at 24,150 tons, Yongtai said. CATL will buy at least 80 percent of Yongtai’s lithium bis(fluorosulfonyl)imide products, and the entire 200-ton monthly output of its vinylene carbonate plant after it becomes operational.

Due to the volatile price of lithium materials, the parties did not estimate the deal’s value, but agreed on a CNY600 million (USD92.8 million) deposit that CATL will pay to Yongtai within 10 days of the contract signing.

Lithium hexafluorophosphate accounts for about 35 percent to 40 percent of the total cost of electrolytes. Its price in the Chinese market rose to between CNY390,000 and CNY425,000 (USD60,300 and USD65,700) per ton early last month from about CNY70,000 (USD10,800) a ton last August. The price is expected to further increase as tight supply will last at least until the first half of next year.

Editor: Futura Costaglione