Executive Interviews

Asian Metal: Mr. Zou, thank you for joining us. Could you briefly introduce your company and its core business?

Mr. Zou: Hunan Meite New Materials Technology Co., Ltd. is a high-tech enterprise focusing on the R&D, production, and sales of LCO, LNCMO, and sodium-ion cathode materials. The company was formerly known as Hunan Meite New Materials Co., Ltd., established on June 28, 2003, and completed its corporate restructuring in 2008. It is now a holding subsidiary of Hunan Salt Industry Group Co., Ltd. Located in Wangcheng Economic and Technological Development Zone, Changsha, the company occupies approximately 75,000 square meters, with total investment close to RMB 600 million. Our core products include high-rate, high-voltage, and high-capacity LCO. The company’s LCO capacity has reached 7,500tpy, ranking among the top five nationwide. In 2025, the operating rate of our LCO production lines stood at around 80%, with output reaching 5,500 tons.

Asian Metal: What is the capacity, output, and competitive landscape of China’s LCO market in 2025?

Mr. Zou: China’s total LCO capacity in 2025 is estimated at approximately 200,000 tons, with output expected to reach around 128,000 tons. From a competitive standpoint, the industry has formed a relatively clear tiered structure. Xiamen Tungsten leads the market with a capacity of about 70,000 tons, accounting for roughly 54% of total capacity. This is followed by second-tier producers such as Tianjin B&M and BASF Shanshan, which together account for approximately 22%. Other key players, including Tianjin Guo'an MGL, Beijing Easpring, Jiangmen Kanhoo, and Meite New Materials, make up the remaining major share at around 20%. Overall, the top three groups collectively represent over 95% of total capacity, indicating a high level of industry concentration.

Asian Metal: What is the corresponding lithium carbonate demand from this output? What share does it represent in China’s total lithium carbonate demand? Has demand increased in 2025?

Mr. Zou: China’s total lithium carbonate supply and demand in 2025 is expected to be around 1.5 million tons. Among this, LCO production consumes approximately 51,200 tons, accounting for less than 4% of total lithium carbonate demand. Driven by rising cobalt prices, cathode material and battery producers began stockpiling in 2025, resulting in a year-on-year increase of about 20% in lithium carbonate demand from the LCO sector. However, this has partially pulled forward demand from 2026. Currently, downstream inventory cycles generally exceed two months, with some companies stocking materials through June 2026.

Asian Metal: What are the main application areas for LCO batteries?

Mr. Zou: LCO batteries are primarily used in 3C electronics and digital devices, accounting for around 20% of total demand, and remain irreplaceable in key applications such as smartphones. In addition, the e-cigarette industry has traditionally relied on LCO batteries. However, due to rising LCO prices, some customers have shifted to a 50% LNCMO + 50% LCO blending solution. Other applications include medical devices and high-end power banks, where LCO remains the preferred choice.

Asian Metal: Cobalt prices have fluctuated upward in 2025 and remain high. What are the key drivers? What is your outlook for Q2 2026?

Mr. Zou: Since February 2025, export policy changes in the Democratic Republic of Congo have led to a suspension of cobalt intermediate exports for 10 consecutive months, tightening supply to China. Previously, China imported around 10,000 metal tons per month, while the DRC’s export quota for 2026 is only about 90,000 metal tons, suggesting continued supply tightness. We expect cobalt prices to maintain an upward trend in Q2 2026, potentially reaching RMB 500,000/t. This is driven by constrained imports of cobalt intermediates and accelerated destocking in China due to battery export tax rebate policies, further tightening raw material supply. As for LCO, current prices remain relatively high for downstream users. We believe around RMB 250,000/t is a more acceptable level. Sustained prices above this may push substitution toward LNCMO. However, in 2026, it is unlikely that LCO prices will fall to that level.

Asian Metal: What is the cost structure of LCO in terms of cobalt and lithium?

Mr. Zou: Cobalt accounts for approximately 80% of LCO production costs, while lithium accounts for about 10%. Industry-wide gross margins are currently around 8%–10%. Benefiting from our strategic stocking of Co?O? at around RMB 150,000/t, our company’s gross margin is expected to exceed 10% this year.

Asian Metal: How do you manage cost pressures from cobalt and lithium price volatility?

Mr. Zou: Unlike companies such as Huayou and GEM, which benefit from upstream resource integration, we focus on market-driven strategies. We build competitiveness through accurate market judgment, strategic inventory positioning at price lows, and strict risk exposure control at price highs. This allows us to balance risk and return in a volatile market. Additionally, we continuously invest in R&D to build a technological moat, helping mitigate cost pressures from raw material fluctuations.

Asian Metal: What are the key drivers for the LCO industry over the next 2–3 years?

Mr. Zou: On the demand side, emerging applications will be the primary growth driver. These include rapid iteration of new 3C products, service and companion robots (including robotic dogs), robotics applications in elderly care, commercialization of the low-altitude economy, and rapid growth in the drone sector. These segments are expected to support annual LCO demand growth of around 10%, with relatively strong visibility.

Asian Metal: There has been strong interest in robots showcased at the Spring Festival Gala. What batteries do they use, and how will robotics impact cobalt and lithium demand?

Mr. Zou: These robots mainly use high-nickel LNCMO batteries, with relatively low cobalt content—around 6% in metal terms—and about 10% lithium carbonate usage. Currently, the robotics sector is still in its early stages and has limited impact on cobalt and lithium demand. However, we expect rapid growth over the next 2–3 years, which will significantly boost demand and support prices.

Asian Metal: What is your outlook for LCO prices in Q2?

Mr. Zou: I expect LCO prices to continue rising in the second quarter. The export control policies introduced by the DRC in early 2025 have significantly constrained cobalt intermediate supply, tightening upstream availability for LCO production. In addition, geopolitical factors and potential tightening of control over Congolese resources by the United States may further restrict supply. Under these conditions, sustained raw material tightness will continue to support and drive LCO prices higher.

Asian Metal: Thank you for your brilliant insights, we wish Meite continuous success.

Mr. Zou: Thank you.