Report Overview - Report Date: August 6, 2025 - Report Title: Lithium Carbonate: Wide - Range Fluctuations, Resource - End Disturbances Unresolved - Analysts: Shao Wanyi (Investment Consulting Qualification No.: Z0015722), Liu Hongru (Contact, Futures Trading Qualification No.: F03124172) 1. Industry Investment Rating - No industry investment rating is provided in the report. 2. Core Viewpoints - The lithium carbonate market is experiencing wide - range fluctuations, and the resource - end disturbances have not been settled yet [1]. - The trend strength of lithium carbonate is 0, indicating a neutral view, with the range of trend strength being integers in the [-2, 2] interval, where -2 is the most bearish and 2 is the most bullish [4]. 3. Content Summary by Directory 3.1 Fundamental Data Tracking - **Futures Contracts**: For the 2509 contract, the closing price was 67,680 yuan, down 1,240 yuan from T - 1; the trading volume was 173,147 lots, down 74,751 lots; the open interest was 175,266 lots, down 32,504 lots. For the 2511 contract, the closing price was 67,840 yuan, down 1,200 yuan from T - 1; the trading volume was 437,207 lots, up 148,821 lots; the open interest was 232,062 lots, up 16,113 lots [2]. - **Warehouse Receipts**: The number of warehouse receipts was 14,443 lots, up 1,840 lots from T - 1 [2]. - **Basis**: The basis of spot - 2509 was 3,520 yuan, up 1,090 yuan from T - 1; the basis of spot - 2511 was 3,360 yuan, up 1,050 yuan from T - 1; the basis of 2509 - 2511 was - 160 yuan, down 40 yuan from T - 1 [2]. - **Raw Materials**: The price of lithium spodumene concentrate (6%, CIF China) was 760 yuan, unchanged from T - 1; the price of lithium mica (2.0% - 2.5%) was 1,710 yuan, unchanged from T - 1 [2]. - **Lithium Salts**: The price of battery - grade lithium carbonate was 71,200 yuan, down 150 yuan from T - 1; the price of industrial - grade lithium carbonate was 69,100 yuan, down 150 yuan from T - 1 [2]. - **Downstream Products**: The price of ternary material 523 (polycrystalline/consumer - type) was 110,360 yuan, up 80 yuan from T - 1; the price of ternary material 622 (polycrystalline/consumer - type) was 114,390 yuan, up 30 yuan from T - 1; the price of ternary material 811 (polycrystalline/power - type) was 145,230 yuan, up 60 yuan from T - 1 [2]. 3.2 Macro and Industry News - SMM's battery - grade lithium carbonate index price was 70,988 yuan/ton, down 139 yuan/ton from the previous working day; the average price of battery - grade lithium carbonate was 71,200 yuan/ton, down 150 yuan/ton; the average price of industrial - grade lithium carbonate was 69,100 yuan/ton, down 150 yuan/ton [3]. - In July 2025, the domestic energy storage market completed 9.0GW/25.8GWh of energy storage system and EPC general contracting procurement and bidding work, and another 1.73GWh of energy storage DC - side orders were finalized. The proportion of independent energy storage projects in the total procurement scale was as high as 92%, while the proportion of renewable energy - paired energy storage projects has been declining for several months, reaching only 3.8% in July [4].

Battery Production - In August, C produced 63 GWh, a month-on-month increase of 15% and a year-on-year increase of 40% [1] - B produced 25.2 GWh in August, with a month-on-month increase of 10% and a year-on-year increase of 50% [1] - E's preliminary production in August was over 12 GWh, showing a month-on-month increase of 2% and a year-on-year increase of 60% [1] - Z's production in August was close to 11 GWh, with a month-on-month increase of 5% and a year-on-year increase of 50% [1] - G produced nearly 10 GWh in August, reflecting a month-on-month increase of 10% and a year-on-year increase of 65% [1] Material Production - For ternary materials, production in August was 0.8 million tons, remaining flat month-on-month but down 30% year-on-year due to lower-than-expected demand in the US [1] - Lithium iron phosphate (LiFePO4) production was 1.8 million tons in August, flat month-on-month and unchanged year-on-year [1] - Another LiFePO4 production line produced 2.5 million tons, with a month-on-month increase of 10% and a year-on-year increase of 10% [1] - Separator production reached over 400 million square meters, remaining flat month-on-month and up 24% year-on-year [1] - Another separator line produced nearly 1 billion square meters, with a month-on-month increase of 9% and a year-on-year increase of 50% [1] - Anode production was 2.7 million tons in August, showing a month-on-month increase of 6% and a year-on-year increase of 30% [1] - Copper foil production was 8,000 tons, flat month-on-month and up 23% year-on-year [1] - Another copper foil line produced over 12,000 tons, with a month-on-month increase of 2% and a year-on-year increase of 33% [1] - Aluminum foil production was over 18,000 tons, remaining flat month-on-month and up 40% year-on-year [1] Industry Trends - The main engine manufacturers are focusing on balancing performance and cost in battery cell procurement [3] - BYD is expanding its presence in Southeast Asia [5] - CATL is experiencing growth in the energy storage market that exceeds that of the power market [5]

Investment Rating - The report maintains a "Buy" rating for the company [8] Core Insights - The company achieved a revenue of 178.886 billion yuan in H1 2025, representing a year-on-year growth of 7.27%, with a net profit of 30.485 billion yuan, up 33.33% year-on-year [5] - In Q2 2025, the company reported a revenue of 94.182 billion yuan, a year-on-year increase of 8.26% and a quarter-on-quarter increase of 11.19%, with a net profit of 16.523 billion yuan, up 33.73% year-on-year and 18.33% quarter-on-quarter [5] - The company continues to innovate with new products, maintaining a competitive edge and steadily increasing its global market share [5][8] Financial Performance - The company's operating cash flow net amount reached 58.687 billion yuan in H1 2025, a year-on-year increase of 31.26% [5] - As of the end of Q2 2025, the company's cash reserves amounted to 350.578 billion yuan, up 37.48% year-on-year [5] - The gross profit margin for H1 2025 was 25.02%, a decrease of 1.51 percentage points year-on-year, while the net profit margin was 18.09%, an increase of 3.17 percentage points year-on-year [5] Market Position and Growth - The company has a global market share of 38.1% in the power battery installation volume from January to May 2025, an increase of 0.6 percentage points year-on-year [5] - The company is the global leader in lithium batteries, with a strong focus on technology and product innovation, which supports its market position [8] - The company plans to accelerate the construction of battery swapping ecosystems and is expected to start small-scale production of solid-state batteries in 2027 [5]

Core Viewpoint - The global energy storage battery market is experiencing significant growth, with a projected shipment of 258 GWh in the first half of 2025, representing a year-on-year increase of 106% [1]. Group 1: Market Overview - Domestic manufacturers are expected to ship 252 GWh, showing a year-on-year growth of 109%, while overseas manufacturers are projected to ship 6 GWh, with a growth rate of 42.5% [1]. - Leading players such as Hicharge Energy, BYD, and China Innovation Aviation are seeing rapid growth, with their shipment volumes nearing 90% of last year's total in the first half of the year [1]. Group 2: Competitive Landscape - The market is characterized by a dominance of CATL, with strong competition from companies like EVE Energy, Hicharge Energy, and BYD [3]. - Major companies are increasingly adopting integrated development strategies, with a growing share of self-owned energy storage systems, particularly BYD [3]. Group 3: Emerging Markets - Significant acceleration in the delivery of large-scale energy storage projects in emerging markets is noted, including projects like BYD's 12.5 GWh in the Middle East and collaborations in Chile [4]. - Traditional markets are influenced by regulatory changes, such as China's 136 document leading to an early rush for installations, and the U.S. experiencing stockpiling due to the IRA Act [4]. Group 4: User Side Developments - The commercial sector in China is primarily focused on profit from peak-valley price differences, but recent policy changes have led to a cautious market sentiment [6]. - New commercial scenarios, such as solar-storage charging and data centers, are witnessing rapid growth despite traditional market challenges [6]. Group 5: Policy Support in Europe - European commercial and residential storage markets are benefiting from substantial subsidy policies, with the Netherlands allocating €100 million for battery storage projects [7]. - Belgium offers a 40% tax deduction for investments in solar and storage systems, the highest in its history, while Greece's subsidy program supports up to 50% for businesses installing storage systems [8].

Core Viewpoint - The lithium battery industry is experiencing a shift with improved profitability for leading battery manufacturers, a turning point for midstream materials, and continued pressure on upstream lithium mines [2]. Production and Sales Growth - In the first half of the year, China's lithium battery production reached 697.3 GWh, a year-on-year increase of 60.4%, while sales totaled 659.0 GWh, up 63.3% [2]. - The growth in production and sales is primarily driven by the expansion of the electric vehicle market, with new energy vehicle production and sales reaching 6.968 million and 6.937 million units, respectively, representing year-on-year growth of 41.4% and 40.3% [3][4]. Profitability of Leading Battery Manufacturers - Leading battery manufacturers such as CATL and BYD are expected to see significant profit growth, with CATL's production volume exceeding 100 GWh, reaching 128.6 GWh, accounting for 43.05% of the market [6]. - CATL's revenue for the second quarter is projected to be 104.7 billion RMB, with a net profit of 15.6 billion RMB, supported by an improved product mix [6]. - BYD's new energy vehicle sales have also increased by over 30% year-on-year, with net profit doubling to 9.155 billion RMB compared to the same period last year [6]. Midstream Material Performance - Negative electrode material companies are beginning to show signs of recovery, with Shanshan Co. expected to achieve a net profit of 160 million to 240 million RMB, a significant year-on-year increase of 810.41% to 1265.61% [9]. - The overall performance of differentiated technology layouts is validating the ability of companies to escape low-end competition, with companies like Zhongke Electric and Nord Co. seeing substantial profit increases due to early investments in high-value products [10]. Upstream Lithium Mining Challenges - The lithium mining sector is facing price declines, with companies like Shengxin Lithium Energy and Yongshan Lithium Industry predicting significant losses in the first half of the year [12][13]. - However, Tianqi Lithium has managed to turn a profit, with a projected net profit of up to 155 million RMB, supported by favorable external factors [13]. - Overall, the market anticipates that the oversupply of lithium will persist in the second half of the year, leading to continued price stabilization and industry restructuring [14].

Core Viewpoint - *ST Weir is attempting to transform its business by acquiring a 51% stake in Shanghai Zijiang New Materials Technology Co., Ltd. for 546 million yuan, aiming to enter the growing lithium battery materials industry after three consecutive years of losses [1][4][9] Group 1: Acquisition Details - The acquisition involves a cash payment to Zijiang Enterprises, Changjiang Chen Dao, and Ningde New Energy, with no issuance of new shares, thus not altering the company's equity structure [2] - The controlling shareholder of both *ST Weir and Zijiang Enterprises is Shen Wen, raising potential concerns about related party transactions [3] - The valuation of Zijiang New Materials was assessed at 1.1 billion yuan, reflecting a 105.61% increase in net asset value [3] Group 2: Financial Performance - *ST Weir has reported revenues of 148 million yuan, 157 million yuan, and 163 million yuan from 2022 to 2024, with corresponding net losses of 20.99 million yuan, 17.06 million yuan, and 17.24 million yuan [7] - The company expects a significant turnaround in the first half of 2025, projecting a net profit of 130 million to 165 million yuan, primarily due to the sale of its automation instrument assets [8] Group 3: Market Context - The lithium battery materials industry is experiencing growth driven by demand from the electric vehicle and energy storage markets, with Zijiang New Materials holding a 22.2% market share in aluminum-plastic film sales [4][9] - Zijiang New Materials has established stable partnerships with major battery manufacturers, but faces risks from high customer concentration, with the top five customers accounting for over 60% of revenue [5][6]

Research Background - The purpose of the research is to understand the operational status, bottlenecks, and future trends of lithium battery-related companies in the Yangtze River Delta region, especially in light of the pessimistic market sentiment due to lithium carbonate prices dropping below 60,000 yuan/ton [1][3] - The research was conducted from July 7 to July 11, 2025, focusing on companies involved in lithium carbonate consumption, trade, and recycling in Jiangsu, Zhejiang, Shanghai, and Anhui [2] Research Summary - The research covered various types of companies in the lithium battery supply chain, including recycling firms, anode and cathode material producers, and lithium ore and salt traders. Key topics included current development status, business layout, challenges, market price outlook, and future development plans [3] - Upstream producers face cost inversion issues, while downstream anode manufacturers deal with price pressure from battery manufacturers and intense competition. Traders are limited by a flat term structure, reducing profit margins. Despite these challenges, companies remain optimistic about the new energy sector as a strategic industry and are not planning to exit [3][4] Recycling Enterprises - Recycling companies are facing difficulties in raw material procurement and cost inversion, with operating rates generally below 20%. The current oversupply of primary lithium means that the market does not require recycled lithium at this time. A significant recovery in recycling is expected post-2028 as large-scale battery retirements occur [6][8] - Company A has an annual production capacity of 300,000 tons for battery material recycling, with a lithium recovery capacity of 30,000 tons. However, it primarily operates as an OEM due to raw material constraints, with a current operating rate of about 20% [7][8] - Company B is building a comprehensive recycling project with a capacity of 200,000 tons, focusing on ternary lithium batteries. It has achieved a recovery capacity of over 80,000 tons and aims to become an industry leader with an annual output value exceeding 10 billion yuan in five years [9] - Company C plans to reach a recycling capacity of 1 million tons by 2032, with a market share of over 25%. It utilizes a unique process that reduces energy costs by 30% and is currently limited by raw material availability [11] Anode Material Production Enterprises - Anode material production remains dominated by lithium iron phosphate, with ternary materials facing significant competition. Sodium batteries currently lack sufficient application scenarios and are unlikely to replace lithium batteries [12] - Company A has a planned capacity of 500,000 tons for lithium iron phosphate, with the first phase already in production. It is currently not profitable and relies on other production lines for support [13][14] - Company B focuses on high-nickel ternary and sodium battery materials, facing severe price pressure and competition. It plans to maintain a small capacity for ternary materials while increasing sodium battery production [15][16] Lithium Ore and Salt Traders - Domestic lithium ore traders primarily source from Zimbabwe and Nigeria, facing challenges due to poor mining planning and political environments in these countries. The current price of lithium carbonate makes it difficult to source ore profitably [18][21] - Trader A has a significant presence in lithium carbonate trading, with a monthly trade volume of several hundred tons and a recent increase in bid volume to 5,000 tons per day [19] - Trader B has begun trading lithium mica and plans to shift to lithium spodumene, facing challenges in sourcing due to low prices and political instability in Nigeria [21] - Trader D, a major lithium carbonate trader, maintains a stock of 6,000-7,000 tons to support a trade volume of 5,000 tons per month, indicating a cautious outlook for lithium carbonate prices in the second half of the year [24]

Group 1: Company Overview - The company, Shenzhen Longte Intelligent Control Co., Ltd., is identified by stock code 300916 and is involved in the production of various electronic products [1]. - The company has successfully entered production at its Thailand factory as of June 2025, initially focusing on PCBA and finished products, with plans to expand into automotive electronics [3]. Group 2: Financial Performance - In Q1 2025, the company's revenue from small energy storage systems increased by 226.68% year-on-year, reaching 170 million [3]. - The company maintains a positive outlook on the growth potential of the energy storage market, particularly in regions like Kenya, Nigeria, Tanzania, and Mozambique, where there is a pressing demand for energy storage solutions [3]. Group 3: Production and Supply Chain - The delivery cycles for ODM projects vary: 2-3 months for consumer PCBA, 6-8 months for smart products, and 6-12 months for automotive electronics [3]. - The Thailand factory's products are primarily supplied to Southeast Asia and Europe, with some raw materials sourced locally and others imported from China [4]. Group 4: Strategic Decisions - The controlling shareholder's recent inquiry for share transfer aims to attract strong institutional investors to enhance market liquidity and support the company's long-term development [4].

Investment Rating - The report maintains a positive outlook on the energy storage sector, highlighting significant investment opportunities due to high demand and favorable policies in various regions [2]. Core Insights - The energy storage market is experiencing robust growth, driven by increasing demand in China, India, and Europe, with substantial project approvals and installations expected in the coming years [5][40]. - The report emphasizes the importance of government policies in facilitating the growth of energy storage systems, particularly in India and Europe, where mandatory storage requirements and subsidies are being implemented [27][64]. Demand Side - In May 2025, China's newly installed energy storage capacity reached 15.85 GWh, marking a year-on-year increase of 228% [14]. - India's energy storage market is projected to exceed 2 GWh in installations for the fiscal year 2025-26, supported by mandatory grid connection requirements [29][30]. - The report notes that the European market is also showing signs of recovery, with increased demand for residential storage systems [49]. Supply Side - As of May 2025, the average price for 2-hour and 4-hour energy storage systems in China was 0.550 and 0.478 CNY/Wh, respectively, indicating a month-on-month change of -6.6% and +7.5% [4]. - The report highlights that the average tender capacity for energy storage projects in China reached 597.3 MWh in June 2025, reflecting a significant increase of 122% month-on-month [26]. - In Germany, the energy storage market is characterized by a notable increase in large-scale storage installations, with 115 MWh added in June 2025, a year-on-year increase of 387% [52]. Regional Highlights - In India, the government is pushing for rapid deployment of energy storage systems, with a total of 36 projects amounting to 34.97 GWh tendered by June 2025 [29]. - The report indicates that the UK has approved new energy storage projects with a total capacity of 2.87 GW in May 2025, contributing to a planned capacity of over 17 GWh [65]. - In the Czech Republic, the total installed capacity of photovoltaic systems with storage exceeded 2 GWh by the end of 2024, with a significant portion of new installations coming from residential systems [72].

Core Insights - The article discusses the recent 1.4GWh energy storage order won by Nandu Power in India, highlighting the growing opportunities for Chinese energy storage companies in the Indian market despite challenges [2][3][20]. Group 1: Company Developments - Nandu Power has signed a significant energy storage order of 1.4GWh with a well-known independent power operator in India, aimed at supporting a large-scale renewable solar project [2][3]. - As of April 2025, Nandu Power has a total of 6.4 billion yuan in signed but unfulfilled orders, including 1.3 billion yuan for domestic energy storage and 1.3 billion yuan for overseas projects [5]. - Nandu Power is also constructing a lithium battery manufacturing base in Zhejiang, with an annual production capacity of 5.6GWh [8]. Group 2: Market Trends in India - India is rapidly deploying variable renewable energy (VRE), which is driving its energy storage market towards a convergence of policy incentives, market demand, and technological advancements [11]. - The Indian government mandates that new energy projects must include 10% of their capacity in energy storage, which is expected to increase the installed capacity of energy storage by more than five times in the next five years [12]. - The Indian Ministry of Power has announced additional funding of 54 billion rupees for the development of 30GWh of battery storage projects, following previous allocations of 37 billion rupees for 13.2GWh [12]. Group 3: Competitive Landscape - Recent bidding opportunities in India have seen over 160GWh of energy storage system tenders released, with 54GWh specifically for battery storage systems [13]. - Local companies dominate the bidding landscape, with JSW Energy emerging as a leader in the independent storage market [16]. - The Indian government is also focusing on enhancing domestic supply chains, aiming for over 140GWh of battery production capacity by 2030 [18][20]. Group 4: Challenges for Foreign Companies - Despite the opportunities, foreign companies face challenges in India, including protectionist policies and stringent requirements for battery performance in high-temperature environments [20]. - The Indian market prioritizes system delivery capabilities and cost per unit of electricity over longevity and intelligent scheduling, which may differ from Western market expectations [20].