(Yicai Global) Dec. 20 -- Lopal Tech’s shares rose after the Chinese lithium-ion battery material supplier announced a CNY350 million (USD55 million) advance payment by battery giant Contemporary Amperex Technology.

After gaining by as much as 7.3 percent in the morning session, Lopal Tech [SHA: 603906] finished the day 1.4 percent higher at CNY42.72 (USD6.70). The Shanghai market fell 1.1 percent.

CATL will make the prepayment to support its capacity expansion plan for power battery lithium iron phosphate anode material, Nanjing-based Lopal Tech said in a statement late yesterday.

Lopal Tech plans to invest CNY800 million to build a new plant with annual capacity of 50,000 tons of LiFePO anode material in eastern Shandong province, the firm said on Dec. 18. To raise funds for its construction and investment, a Lopal Tech affiliate and CATL penned a cooperation deal on Dec. 17, according to which the latter would make a CNY350 million advance payment for the capacity expansion before today.

In exchange, CATL will receive a discount of CNY2,150 (USD337) on the market price per ton of LiFePO bought from the plant before the end of 2023.

The market price of LiFePO for power batteries was between CNY35,000 and CNY37,000 (USD5,487 and USD5,801) a ton earlier this month, with the cost of LiFePO for energy storage batteries at CNY31,000 to CNY35,000 a ton, according to data from commodity price information site OilChem China.

Lopal Tech did not provide the plant’s construction schedule, but said CATL will be the sole distributor of about 75,000 tons of LiFePO anode material from the facility from next year to the end of 2023.

Editor: Peter Thomas