Market‑Wide Surge in Lithium‑Battery Materials and Its Implications for Shandong Fengyuan Chemical Co. Ltd
The Chinese stock market opened on 26 December 2025 with a pronounced rally across lithium‑battery–related sectors. The Shanghai Composite, Shenzhen Component and ChiNext indices all posted gains in the morning trade, buoyed by a collective surge in companies that supply critical battery raw materials and components. Firms such as Feng Yuan Shares, Tianji Shares and Wàn Rùn Xīn Néng all hit daily limits, while the lithium‑carbonate futures market broke the 130 yuan per ton barrier, setting a new high since November 2023.
How the Lithium‑Battery Upswing Affects a Chemical Raw‑Material Producer
Shandong Fengyuan Chemical Co. Ltd. (SZ 002805) is a listed company on the Shenzhen Stock Exchange that specialises in the manufacture and sale of chemical raw materials, including oxalic acid, nitric acid, sodium nitrate and related products. The firm also engages in international trade. Its business profile places it within a broader supply chain that supplies feed‑stock and ancillary chemicals to the battery industry.
The lithium‑battery boom has heightened demand for high‑purity acids and salts used in electrolyte preparation, electrode fabrication and other battery‑assembly processes. Although Feng Yuan Shares is not a direct supplier of lithium‑carbonate, the surge in lithium‑battery materials signals a broader uptick in consumption of specialty chemicals. As a producer of nitric acid and sodium nitrate—both key precursors for lithium‑salt synthesis and for cleaning processes in battery production—Shandong Fengyuan stands to benefit from the increased throughput in the sector.
Company Fundamentals in Context
- Market Capitalisation: ¥4 744 259 072
- Recent Close (23 Dec 2025): ¥16.94 The stock has traded within a 52‑week range of ¥9.50 to ¥23.85, indicating moderate volatility in a sector that has been highly responsive to policy cues and commodity price swings.
- Price‑Earnings Ratio: –7.79 A negative P/E reflects earnings below break‑even, a common trait among companies whose revenues are sensitive to raw‑material price cycles and capital‑intensive production facilities.
- Primary Exchange: Shenzhen Stock Exchange The listing provides access to a broad investor base that closely follows industrial and commodity trends.
Recent Corporate Action: Audit Committee Update
On 23 December 2025, Shandong Fengyuan announced a change in its audit quality‑control reviewer. The former reviewer, Xiu Xia, was replaced by Chen Xiujian within the accounting firm Daxin Certified Public Accountants (Specialised General Partnership). The company stated that the transition would not affect the continuity of its 2025 financial statements or internal‑control audit processes. While a routine administrative update, the move underscores the company’s commitment to maintaining rigorous financial oversight, a factor that may be reassuring to investors amid the heightened market activity in the lithium‑battery space.
Outlook
The recent rally in battery‑related stocks reflects both policy support—such as the “old‑to‑new” vehicle‑recycling incentive capped at 13 000 yuan—and tightening of supply chains, particularly in lithium‑carbonate. For Shandong Fengyuan, the implications are twofold:
- Demand Upswing: The surge in battery manufacturing is likely to drive higher consumption of specialty chemicals, potentially lifting revenues and margins for companies that can meet quality and supply‑chain requirements.
- Competitive Pressure: As prices for raw materials rise, firms may negotiate higher rates with downstream customers. Shandong Fengyuan will need to balance cost‑control with pricing power to maintain profitability, especially given its current negative earnings outlook.
Investors monitoring the company should therefore pay close attention to any subsequent earnings releases, capacity expansion plans, and supply‑chain developments that may be influenced by the broader lithium‑battery market dynamics. The company’s foundational role in the production of acids and nitrates positions it strategically to capture incremental demand, provided it can navigate the ongoing volatility in commodity prices and regulatory landscapes.
