Cathode Materials

What it is

Cathode material is the lithium-bearing powder that, with the anode, stores a battery's energy. The two main families are lithium iron phosphate (LFP) and nickel-cobalt-manganese (NMC, or ternary). They are made from lithium compounds plus iron phosphate or nickel and other metals.

Where China stands

Industry data cited in the filings put China's first-half 2026 cathode shipments at 3.32 million tonnes, up 59%, with phosphate cathode at 2.70 million tonnes, up 68%, over 80% of the total. LFP also made up 80.3% of China's power battery installations (Hunan Yuneng 2026 interim report, p. 11). Global ternary output was 572,300 tonnes, up 23.9%, while LFP output was 2.72 million tonnes, up 61% (Ronbay 2026 interim report, p. 9).

Two listed companies show the two chemistries:

• Hunan Yuneng (湖南裕能, 301358.SZ) sold 667,200 tonnes of phosphate cathode, up 38.8%, with revenue of ¥34.88bn and a net profit of ¥2.91bn. It names CATL, BYD, EVE, Hithium, Envision, Ruipu Lanjun and Gotion as customers, and says it has been the world's largest phosphate cathode shipper every year since 2020 (report, pp. 8, 12, 15, 16).
• Ronbay Technology (容百科技, 688005.SH) sold about 52,000 tonnes of ternary cathode, with revenue of ¥8.72bn and a net profit of ¥109.4m. Its second and third largest customers are overseas companies, together over 30% of sales (Ronbay report, pp. 7, 8, 10).

Huayou Cobalt (华友钴业, 603799.SH) is also a major ternary maker: it shipped 76,300 tonnes of ternary cathode in the half, up about 93%, with ultra-high-nickel products over 70% of the mix, and 80,800 tonnes of precursor (2026 interim report, p. 10).

Price pass-through and margins

Both companies' revenue grew faster than their volumes because lithium prices rose. Yuneng's revenue rose 142.9% on a volume increase of 38.8%, while Ronbay says its selling prices follow raw materials (Yuneng p. 16, Ronbay p. 7). Yuneng's phosphate cathode gross margin was 14.81%, up 7.84 points (p. 18).

Our view: cathode makers are price takers on both sides, buying lithium at its swinging price and selling to a small number of large battery makers. The first-half numbers show the effect on revenue, not a stronger business: a 14.8% margin and a ¥109m profit on ¥8.7bn of revenue leave little buffer if lithium falls.

What to watch

• Lithium price. Cathode revenue and margins follow lithium prices; see lithium mining and refining.
• Chemistry mix. Ronbay says nickel-rich products rose to about 35% of its shipments and its LMFP product is sold out, while Yuneng is pushing higher-density LFP (Ronbay p. 10, Yuneng p. 16).
• Integration. Yuneng is moving back into phosphate rock, iron phosphate, lithium carbonate processing and recycling (p. 15).