Battery Electrolyte

What it is

Electrolyte is the liquid in a cell that moves lithium ions between the cathode and anode. It is a solvent mixed with lithium salts, mainly lithium hexafluorophosphate (LiPF6) and newer salts such as LiFSI, plus additives. It is made from lithium chemicals and goes into battery cells.

Where China stands

Two listed companies lead:

• Tinci Materials (天赐材料, 002709.SZ) sold over 440,000 tonnes of electrolyte in the first half of 2026, up about 41%, with storage electrolyte up more than 100%. Revenue more than doubled to ¥14.71bn and net profit rose to ¥2.86bn from ¥268m. Its lithium battery materials line earned a 33.72% gross margin, up 16.67 points (2026 interim report, pp. 8, 12, 14).
• Capchem (新宙邦, 300037.SZ) had battery chemicals revenue of ¥5.75bn, up 104.3%, at a 15.32% gross margin, up 5.61 points. Its group net profit was ¥983.8m, up 103.3%, and it plans 1.5 million tonnes a year of global electrolyte capacity (2026 interim report, pp. 17 to 19).

Both credit storage demand: Tinci's storage electrolyte more than doubled and it tied several domestic storage customers in with long-term contracts, while Capchem points to storage and power battery growth (Tinci p. 12, Capchem p. 19).

The margin gap

Tinci's margin is more than double Capchem's, but the groupings differ, since Tinci's lithium battery materials line also includes lithium salts and cathode materials. Tinci says its liquid-process LiPF6 costs well below the industry average and that it is raising self-supply of lithium salts through battery recycling and lithium processing (Tinci pp. 11, 12). Capchem says its joint venture Shilei helps secure key raw materials (Capchem p. 18).

Our view: electrolyte profits follow lithium salt prices, as lithium does, and the gap between the two leaders is consistent with Tinci's integration into the salts, though the different product groupings mean the filings do not prove it. Both companies' profits are more than double a year earlier, which says more about prices and storage demand than about a lasting advantage.

What to watch

• Salt prices. Both companies' margins rose by several points, and a fall in lithium or LiPF6 prices would reverse that.
• Capacity. Capchem's 1.5 million tonnes plan and Tinci's European contract plant are the expansions named.
• Sodium-ion. Tinci has developed sodium hexafluorophosphate and NaFSI electrolyte formulations to go with its own cathode (Tinci p. 12).