(Yicai) July 17 -- Shares in Guangzhou Tinci Materials Technology surged more than 6 percent today after the leading Chinese supplier of lithium battery electrolytes and related chemicals said it has inked a long-term supply deal with battery manufacturer Cornex New Energy worth almost CNY10 billion (USD1.4 billion) based on current market prices.

Tinci’s share price [SHE:002709] closed up 6.4 percent at CNY19.46 (USD2.71) today.

Tinci will supply Cornex’s three factories in central Hubei province with 550,000 tons of lithium battery electrolytes and key chemicals between now and the end of 2030, the Guangzhou-based firm said yesterday, citing the agreement penned by the two parties.

No further details were disclosed, except that pricing will be adjusted each month based on market conditions. At the current market value of CNY17,600 (USD2,451) per ton of electrolytes, the contract has an estimated value of nearly CNY10 billion.

The electrolytes and chemicals will come from Tinci’s production facility in Jiujiang in eastern Jiangxi province, which sits on the Yangtze River and is the company’s biggest factory. It is also the world’s largest facility for the production of lithium hexafluorophosphate solution, a key chemical used in lithium battery electrolytes.

Cornex, which produces both energy storage and power batteries, is gearing up for a major expansion in capacity. The Wuhan-based firm’s annual battery production capacity was 110 gigawatt hours as of the end of last year and it is predicted to rise to 350 GWh by the end of this year.

To ensure an adequate supply of raw materials, Cornex also signed a long-term procurement contract with Jiangsu Lopal Tech in May to purchase 150,000 tons of lithium iron phosphate cathode materials over the next five years.

Editor: Kim Taylor