(Yicai Global) Sept. 23 -- Yongtai Technology’s shares jumped after the Chinese chemicals producer said it expects third-quarter net profit to climb as much as 20 times from the same period last year due to surging prices and a new plant coming on stream.

Yongtai Technology’s stock price [SHE:002326] closed up 5 percent at CNY62.98 (USD9.74) today, after earlier gaining as much as 9.9 percent.

Net profit is likely to be between CNY250 million and CNY306 million (USD40 million and USD47.3 million) in the three months ending Sept. 30, up 1,500 percent to 1,900 percent from the same period last year, the Zhejiang province-based firm announced late yesterday.

Yongtai attributed the gain mainly to surging demand for lithium hexafluorophosphate and subsequent price increases in the current quarter. Its new plant for additives for lithium battery electrolytes based in Inner Mongolia Autonomous Region also became operational and started selling products, it added.

For the first nine months of the year, Yongtai said it expects to make a profit of CNY353 million to CNY402 million, compared with CNY227 million a year ago.

Lithium hexafluorophosphate is one of the main components of lithium battery electrolytes and accounts for about 35 percent to 40 percent of the total cost of electrolytes. Prices have risen to CNY450,000 (USD69,600) from about CNY100,000 earlier this year because of strong demand.

On July 31, Yongtai signed a long-term supply deal with CATL which will last through 2026. The minimum order for lithium hexafluorophosphate was set at 24,150 tons. Moreover, 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 in Inner Mongolia Autonomous Region.

Editor: Futura Costaglione