HuaSheng Lithium Adjusts VC Project Plan: 60,000-Ton Capacity to Be Built in One Phase

On July 11, Huasheng Lithium Battery announced in a public notice that it would adjust the implementation plan for its controlled subsidiary Hubei Huasheng’s 60,000-ton-per-year vinylene carbonate (VC) project. Originally, the project was to be built in two phases: Phase I with a capacity of 30,000 tons and an investment of RMB 950 million, followed by Phase II with another 30,000 tons, to be launched opportunistically depending on market conditions, bringing total investment to RMB 1.6 billion. Under the revised plan, the phased approach has been scrapped in favor of constructing the full 60,000-ton capacity in one go, with total investment remaining unchanged at RMB 1.6 billion. VC is one of the core additives in lithium battery electrolytes. Driven by rapid growth in the power battery and energy storage sectors, demand for related materials continues to rise. However, VC is classified as a high-risk fine chemical product, subject to stringent environmental and safety regulations. Consequently, project approvals, construction timelines, and production ramp-up periods are lengthy, creating significant barriers to capacity expansion and limiting near-term additions of effective supply. Huasheng Lithium Battery currently has an annual VC production capacity of 14,000 tons. The revised plan is expected to accelerate capacity release, enabling the company to capitalize on peak seasonal demand, meet downstream customers’ supply requirements, and reinforce its market position in lithium battery additives. Nevertheless, potential risks remain during project execution, including short-term cash flow pressure, rising financing costs, construction delays, and intensified industry competition. In the first half of this year, inventory across the lithium battery VC supply chain remained tight, with minimal buffer stocks held by either upstream or downstream players, exacerbating supply-demand imbalances and worsening shortages. Leading companies, including Huasheng Lithium Battery, have already signed long-term supply agreements with major battery manufacturers such as CATL and BYD, further consolidating market share among industry leaders. Other key players—including Genyuan New Materials, Yongtai Technology, and Sunvim Group—are also advancing their own VC capacity expansion plans. Amid persistent supply-demand tightness, VC prices have continued to climb, reaching an average market price of RMB 165,000 per ton in early July. Industry participants expect strong demand during the second-half lithium battery peak season to keep prices elevated.