(Yicai Global) Jan. 4 -- Zhongfu Shenying Carbon Fiber intends to invest CNY6 billion (USD866 million) to raise its capacity to make high-performance carbon fibers.

The major Chinese supplier of carbon fibers and composite materials will build a new plant in Lianyungang, Jiangsu province, where it is headquartered, that can produce 30,000 tons of high-performance carbon fiber a year, the company said yesterday. Construction will begin in April and finish in August 2026.

The factory will use Zhongfu Shenying’s own high-performance carbon fiber production technology. Once operational it is expected to make a 19.9 percent annual return after tax, much improving the firm’s overall strength and market share, it added.

Carbon fibers are polymers composed of more than 90 percent carbon, are seven to 10 times stronger than steel, and are the No. 1 chemical fibers for resistance to high temperatures. China needs more than 60,000 tons a year, but the country only produces 30,000 tons, creating a severe shortage, according to industry figures.

Zhongfu Shenying is also building a 25,000-ton carbon fiber plant in Xining in China’s western Qinghai province. The first phase went into production in the second half of 2021 with an annual output capacity of 11,000 tons, becoming the first in China to be able to turn out over 10,000 tons a year. The firm’s annual capacity stood at 14,500 tons at the end of last June.

Zhongfu Shenying is controlled by China National Building Material Group. Its carbon fiber products have been used in the aerospace, pressure vessels, composite materials, and wind power blade fields, according to the firm’s website.

The firm’s stock price [SHA: 688295] ended 0.5 percent lower at CNY45.92 (USD6.67) today, after opening up 1.4 percent.

Editor: Futura Costaglione