Core Viewpoint - The shipment volume of negative electrode materials in China is expected to reach 1.29 million tons in the first half of 2025, representing a year-on-year growth of 37%, although this growth rate is lower than that of other major materials due to inventory accumulation in anticipation of price increases in early 2024 [1] Shipment and Forecast - The shipment volume of negative electrode materials in China is projected to exceed 2.6 million tons in 2025, with a year-on-year growth of over 25% [1] - In the first half of 2025, the shipment volume of artificial graphite is expected to be 1.17 million tons, showing a year-on-year increase of 47%, accounting for 91% of the total shipment volume of negative electrode materials [2] - The shipment volume of natural graphite is anticipated to be 106,000 tons, reflecting a year-on-year decline of 23% [2] Price Trends - In the first quarter of 2025, the price of negative electrode petroleum coke increased by over 40% month-on-month, while prices began to decline in the second quarter, with minimal impact on negative electrode prices [5] - The price of natural graphite has slightly decreased due to competition from artificial graphite [5] Product Development - New generation high-capacity energy storage products are driving improvements in the capacity of artificial graphite, with battery companies testing products moving from 350 mAh/g to 353-355 mAh/g [5] - The compact density of products is evolving from 1.6 g/cm³ to 1.65 g/cm³, and the penetration rate of fast-charging products (4C) has surpassed 15% [5] - New silicon-carbon materials have been shipped in small quantities, with approximately 100 tons shipped in June, over 80% of which is applied in high-end digital fields [5] Capacity and Utilization - The negative electrode industry is experiencing structural overcapacity, similar to the lithium iron phosphate and battery industries, with the top five companies achieving over 70% capacity utilization [5] - Some small and medium-sized enterprises are struggling with order shortages, often becoming processing plants or ceasing operations [5] - The head negative electrode companies are expected to rely on small and medium-sized enterprises for processing and their own expansion, primarily in overseas or western bases, leading to a gradual increase in overall industry capacity utilization [5] Industry Outlook - The negative electrode materials industry is gradually emerging from a downturn, with expectations for a new upward cycle to begin in the second half of 2025 or the first half of 2026 [5]

Group 1 - The central government emphasizes the need for rational industrial development and warns against blind investment and bureaucratic practices in the new energy vehicle (NEV) sector [2] - Local governments have been overly enthusiastic about investing in NEVs, leading to a proliferation of projects that lack strategic planning and market consideration [3] - The NEV industry has seen numerous failed investment cases, with several projects backed by local governments turning into abandoned or stalled initiatives [3] Group 2 - Blind investments and repeated construction have resulted in insufficient capacity utilization in the domestic automotive industry, with a notable decline in capacity utilization rates [4] - In 2024, the capacity utilization rate for the domestic automotive manufacturing industry is projected to be 72.2%, down 2.4% from the previous year, and still below the overall industrial average of 75% [4] - The top 20 passenger car manufacturers in China have a total capacity of approximately 35 million units, yet the overall average capacity utilization rate is below 50%, indicating structural overcapacity [4] Group 3 - The need for a shift from impulsive investments to a more rational, localized approach is critical to prevent structural overcapacity and ensure the success of quality projects [4]

Core Viewpoint - The lithium battery materials industry in China faced significant challenges in 2024, with overall revenue declining and profits becoming increasingly polarized among companies [8][26]. Industry Overview - In 2024, the revenue of major lithium battery material companies in China decreased across all four main materials, with cathode materials dropping over 40%, electrolyte down 20%, anode down 4.5%, and separators down 11.7% [8][9]. - Approximately half of the 38 listed companies reported losses, with cathode and electrolyte companies experiencing negative profits, while anode and separator companies managed to resist declines due to technological barriers, although their profits also fell significantly [8][9]. Cathode Materials - Cathode materials saw the largest revenue and profit declines, primarily due to a sharp drop in lithium salt raw material prices, which fell from approximately 600,000 yuan/ton at the end of 2022 to 77,000 yuan/ton at the end of 2024 [9]. - The market for ternary materials was particularly hard hit, with shipments remaining flat at 650,000 tons in 2024, while phosphate iron lithium materials surged by 49.1% to 2.46 million tons [9]. Anode Materials - Anode materials experienced a relatively small decline in revenue and profit, with shipments increasing by 26% to 2.08 million tons in 2024, offsetting price drops [10]. - The market showed a clear "two-tier" trend in capacity utilization, with leading companies achieving high utilization rates while newer entrants struggled [18]. Separator Materials - The revenue of listed companies in the separator segment fell by 11.68% to 15.79 billion yuan, with net profits plummeting by 85% to 838 million yuan [20]. - Price declines were the main factor for profit drops, with the average price of wet separators decreasing by over 30% throughout the year [21]. Electrolyte and Upstream Materials - The electrolyte segment saw a 20% revenue decline, with upstream materials like lithium hexafluorophosphate experiencing significant price drops, leading to a 9.34 billion yuan loss across ten companies [11][22]. - The industry is expected to see a consolidation of market share towards leading companies, while smaller firms face increasing pressure to exit the market [26]. Future Outlook - The lithium battery materials industry is anticipated to remain in a state of micro-profit or loss due to ongoing price pressures, with a need for companies to innovate and optimize costs to survive [26].

Core Insights - The lithium battery cathode materials industry is experiencing price stagnation, with lithium iron phosphate (LFP) and ternary materials prices remaining low since early 2024, stabilizing after September, and expected to rise due to cobalt price increases following the suspension of cobalt exports from the Democratic Republic of Congo in February 2025 [1][8]. Industry Policy - Domestic policies are focused on optimizing capacity layout and promoting energy conservation and carbon reduction, leading to the elimination of inefficient production capacities. International regulations are tightening, pushing companies to enhance supply chain resilience through technological innovation and resource integration [2][3][5]. - The State Council's 2024-2025 Energy Conservation and Carbon Reduction Action Plan emphasizes the need for advanced energy efficiency in new lithium battery projects, aiming to curb the disorderly expansion of high-energy-consuming capacities [3][4]. Key Industry Indicators - In 2024, the total output of lithium battery cathode materials in China is projected to reach 3.292 million tons, a year-on-year increase of 32.9%. LFP materials are expected to grow by 48.2%, capturing a market share of 73.7%, while ternary materials are forecasted to decline by 3.2%, reducing their market share to 19.5% [7][8]. - The total industry output value for lithium-ion battery cathode materials in China is estimated at 209.62 billion yuan in 2024, reflecting a significant year-on-year decline of 34.9% [9]. Industry Chain Situation - The upstream resources for lithium battery cathode materials, including nickel, cobalt, and lithium, are heavily reliant on imports. Future strategies include diversifying overseas mineral investments and enhancing domestic resource exploration [10][11]. - The downstream demand is primarily driven by power batteries, with a notable surge in the energy storage sector. In 2024, the installed capacity of power batteries in China is expected to reach 548.4 GWh, a year-on-year increase of 41.5% [12][13].