(Yicai) Sept. 30 -- Huayou Cobalt’s shares surged after the major Chinese producer of lithium battery materials said it had secured a five-year deal to supply South Korea's LG Energy Solution

Huayou Cobalt [SHA: 603799] closed 9.4 percent higher at CNY65.90 (USD9.26) a share in Shanghai today, after earlier gaining by its 10 percent daily trading limit. The stock is up 125 percent since the end of last year.

Huayou Cobalt's factory in Quzhou will supply around 76,000 tons of ternary precursor cathode materials to LG Energy or its designated purchasers through the end of 2030, the Zhejiang-based firm announced late yesterday. In addition, its Hungarian plant will provide about 88,000 tons of the materials to LG Energy's Polish factory.

LG Energy is one of the world's largest battery manufacturers. Its factory near the Polish city of Wroclaw is an important lithium battery production base in Europe.

Huayou Cobalt did not disclose the order’s value, but based on the current average price of ternary cathode materials, it could bring revenue of about CNY20 billion (USD2.8 billion).

The deal will help deepen the ties between the two parties, boost the market share of related products, lift Huawei Cobalt's competitiveness in the global lithium battery industry chain, and positively impact its annual earnings over the next five years, it said.

Huayou Cobalt has been a regular supplier of battery materials for LG Energy since 2023. It has a joint venture with LG Chem, the Seoul-based firm’s parent company, focusing on the production of lithium battery cathode materials in South Korea, Indonesia, and other countries.

Editor: Martin Kadiev