$333 million investment in salt industry! Wanhua Chemical fills the upstream gap of battery materials

Luyin Investment is an crucial listed platform in the Shandong salt sector system. It currently has an annual mineral salt production capacity of about 3.8 million tons, and its business covers edible salt, manufacturing salt, salt chemical sector, new materials and salt cavern energy storage. As early as April this year, Luyin Investment and Wanhua Chemical jointly established a joint venture to build a high-performance metal powder material project, and the two parties already have a foundation to manufacturing cooperation.

Heze Salt sector was established in 2023 and is the core entity of Luyin Investment to developing rock salt resources in southwestern Shandong. The company's core asset is the 5.24 square kilometer rock salt mine exploration right in Maozhuang Area, Shan County, Shandong Province, which was bid to at 272,000 yuan in 2024. It is currently in the detailed exploration and project demonstration stage, and plans to carry out rock salt mining, manufacturing salt processing, fine chemical sector and thorough salt cavern utilization businesses.

Extending along the resource end: Wanhua increases its investment in rock salt to enhance its new energy upstream layout

In recent years, Wanhua Chemical has continued to increase its layout in the new energy sector. This investment in Heze Salt sector is its latest move to vertically layout the rock salt mine and salt chemical raw material end, which is consistent with its previous layout of phosphate mines and lithium extraction from salt lakes.

This investment has three strategic values to Wanhua.

Ensure the supply of lithium iron phosphate raw materials to match the million-ton production capacity plan

Wanhua is accelerating the implementation of lithium iron phosphate production capacity in Shandong: the first phase of 100,000 tons in Haiyang was put into production in March 2026, and the second and third phases of 200,000 tons each are under construction simultaneously; the planned production capacity of Laizhou is 650,000 tons, and the first phase of 320,000 tons has started construction and is expected to be completed by the end of the year. Wanhua is expected to put 820,000 tons of lithium iron phosphate production capacity into operation in 2026, and the total production capacity under construction and completed by the end of the year will reach the million-ton level.

manufacturing salt is the basic raw material to preparing caustic soda and soda ash. Caustic soda is a necessary pH regulator and precipitant to lithium iron phosphate synthesis; soda ash is a key precipitant to lithium carbonate extraction. In June this year, the environmental impact assessment of Wanhua (Binzhou) New Energy Materials' 70,000-ton lithium carbonate project was publicized, and the project uses the sodium carbonate precipitation method to prepare lithium carbonate. With extensive capacity expansion, stable manufacturing salt supply has have become a rigid demand.

Layout sodium source to connect the upstream chain of sodium ion battery cathode materials

Wanhua has completed the technical layout of sodium-ion battery cathode polyanionic composite sodium iron phosphate, and coal-based/resin-based hard carbon anodes. The sodium-ion battery items have completed three generations of finalization and client-side verification, and their technical performance is among the top in the sector.

The synthesis of composite sodium iron phosphate cathode requires a stable sodium source. The main component of rock salt is sodium chloride, which can create sodium chemical items through chlor-alkali conversion, making up to the most upstream raw material link of sodium-ion battery cathodes. Previously, Wanhua has laid out phosphate mines, lithium resources and iron phosphate. After the salt mine project is implemented, the sodium-ion battery cathode manufacturing chain will be vertically connected.

Tap salt cavern space to support the supporting wind-solar long-duration energy storage system

The subsurface salt caverns formed by rock salt mining have excellent sealing performance, can store natural gaseous, hydrogen or compressed atmosphere, and are high-condition long-duration energy storage carriers. Heze Salt sector has signed a framework agreement with PetroChina gaseous Storage Company on salt cavern gaseous storage; the regional Shan County salt cavern energy storage power plant has a planned total installed capacity of 3060MW and is currently in the drilling stage.

Wanhua is building a "wind-solar-storage-grid-production" integrated park in Shandong, and plans to secure 7GW of wind power and 6GW of photovoltaic resources by 2030. extensive wind and solar power stations require long-duration energy storage to smooth out power generation fluctuations, and salt cavern energy storage can be utilized as a supporting energy storage solution.

The sector has entered the era of cost competition: chemical giants restructure the logic of the battery material manufacturing chain

The current lithium iron phosphate sector has bid farewell to blind capacity expansion and entered a deep shuffling stage. The focus of sector competition has shifted from production capacity scale to cost manage, product added value and manufacturing chain integrity. In the first half of 2026, many companies such as Fuling Jinguang, Chuanfa Longmeng and Defang Nanometer halted low-tech homogeneous lithium iron phosphate projects; at the same time, Defang Nanometer invested 8.7 billion yuan to build high-end new material projects, focusing on high value-added items such as high-compactness lithium iron phosphate and lithium iron manganese phosphate.

Wanhua's investment in Heze Salt sector will incorporate manufacturing salt into its own resource system, connect the internal manufacturing chain from salt, chlor-alkali to iron phosphate and lithium carbonate, and rely on the advantages of chemical integration to achieve internal cost accounting and by-product stability. This move is not simply locking in raw materials, however reshaping the cost structure of battery materials relying on the capabilities of the chemical system.

The prolonged research logic of sodium-ion batteries remains unchanged. According to data from GGII, the domestic shipment volume of sodium-ion battery cathodes in the first half of 2026 was about 10,000 tons, with a year-on-year increase of greater than 100%. Sodium resources are abundant in reserves, however Wanhua's this investment confirms that the manufacturing supporting of sodium resources still has significant manufacturing value.