Sichuan Zichen Boosts Anode Production Amid Market Challenges

Capacity Expansion in Response to Growing Demand
Sichuan Zichen Technology, a significant player in the Chinese anode materials market and a subsidiary of Shanghai Putailai, is actively increasing its production capacity to meet the surging demands of the new energy vehicle (NEV) sector. The company is currently constructing a new facility in Sichuan province, which is expected to enhance its anode material output substantially.

Details of the Expansion in Qionglai
The latest phase of Zichen’s production complex, located in Qionglai city, is set to add 100,000 tons per year to the existing production capabilities. This second phase of construction is on track for completion by the end of this year, complementing the first phase that began operations in July with an identical output capacity. Looking ahead, Zichen plans to initiate a third phase of development by the end of 2025, which will contribute an additional 80,000 tons annually. Once completed, the total design capacity will reach 280,000 tons per year, positioning Zichen to better serve the expanding NEV market.

Sales Challenges Amid Market Fluctuations
Despite these significant expansions, Zichen’s parent company, Putailai, has encountered some challenges, as reflected in a slight decline in sales. In the first half of the year, the company sold 66,992 tons, a decrease of 1.8% from the 68,197 tons sold during the same period last year. This decline is largely attributed to a steep drop in graphite flake prices, which have fallen to their lowest levels in nearly six years. The reduced prices for graphite flakes have led to a corresponding decline in anode prices, directly impacting sales amid slower growth in the NEV market.

NEV Industry’s Robust Growth Remains a Bright Spot
In contrast to Zichen’s sales challenges, the NEV sector in China is continuing its impressive growth trajectory. Production in the NEV industry surged by 32% year-over-year, reaching 8.316 million units from January to September. Additionally, sales climbed by 33%, totaling 8.32 million units during the same timeframe, as reported by the China Association of Automobile Manufacturers (CAAM). This robust performance in the NEV market highlights a strong underlying demand for anode materials, providing a glimmer of optimism for Zichen and the broader industry despite the pricing challenges.