Summary of Key Points from the Conference Call on China Battery Materials Industry Overview - The report focuses on the lithium battery materials industry in China, particularly lithium production and pricing trends as of late August 2025. Core Insights 1. **Lithium Production and Inventory Levels** - Lithium production and inventory levels remain high, showing little week-over-week change. This indicates a stable supply situation in the market [1][2] 2. **Inventory Structure Changes** - There has been a significant shift in inventory structure, with increasing inventory levels moving towards downstream clients, traders, and GFEX. This suggests a potential change in demand dynamics within the supply chain [1] 3. **Spodumene Import Volumes** - July 2025 saw record high spodumene import volumes, the highest since January 2024. Notably, imports from Australia showed the greatest elasticity due to shorter shipping times compared to Africa [1] 4. **Domestic Carbonate Output** - Spodumene-based carbonate accounted for approximately 64% of domestic carbonate output last week, a notable increase from 47% in early July. This shift may impact pricing and production strategies [1] 5. **Price Trends** - The average selling price (ASP) for lithium carbonate (Li2CO3) and lithium hydroxide (LiOH) has shifted downward, with current prices at Rmb80,000/ton and Rmb77,000/ton respectively, compared to Rmb85,200/ton and Rmb77,700/ton the previous week [2] 6. **Production Changes** - China's Li2CO3 production decreased by 1% week-over-week to 19,030 tons. The output from brine and lepidolite decreased by 1% and 6% respectively, while spodumene and recycled lithium saw a 1% increase [2] 7. **Inventory Levels** - Total inventory of Li2CO3 stood at 141,136 tons, remaining stable week-over-week. Inventory levels among downstream players increased by 3%, while smelters saw a 7% decrease [2] Additional Important Points - **Upcoming Catalysts** - The upcoming mine license checks for the remaining seven lepidolite mines post-September 30, 2025, are critical events to monitor, as they may influence supply and pricing in the near term [1] - **ASP Risks** - There is a near-term risk of ASP decline due to the removal of overhang from Yongxing's safety production license, which could lead to increased market supply [1] This summary encapsulates the key findings and insights from the conference call regarding the lithium battery materials industry in China, highlighting production, inventory, pricing trends, and future catalysts.

Core Insights - Rock Tech Lithium Inc. has been awarded funding from the Federal Ministry for Research, Technology and Space for the project "ELiSePro – Efficient Lithium Recovery Using Selective Processes" aimed at increasing lithium yield at the Guben site, contributing to Germany's raw material independence [1][4] - The project will be executed in collaboration with RWTH Aachen University, emphasizing the partnership between industry and academic research in Germany, with total funding amounting to approximately 250,000 Euros [2][9] - Various advanced ion separation methods will be compared to minimize lithium losses, with results intended for direct industrial application and publication in scientific journals [3] Company Strategy - The funding supports technological advancement in the German and European battery industry, marking a significant step towards enhancing supply security for critical raw materials and building sustainable value chains in Europe [4] - Rock Tech has received multiple public funding sources recently, positioning itself as a strategic player in the lithium industry, including funding from EIT RawMaterials (800,000 Euros) and Ontario's Critical Minerals Innovation Fund (388,000 CAD) [5] - The company aims to supply the electric vehicle and battery industry with sustainable lithium, targeting a 100% recycling rate and plans to build lithium converters in Germany and Ontario, Canada [6]

Report Summary 1. Investment Rating No investment rating for the industry is provided in the report. 2. Core View The current lithium ore, lithium salt, and battery cell markets are under significant inventory pressure, and the de - stocking process is slow. The medium - and long - term supply - demand imbalance has not been substantially alleviated. There are two short - term logics in the market: a negative feedback cycle of "lithium salt price drop - ore price decline - lithium salt price drop again" and a stepped upward chain of "futures price increase - production capacity release - increased ore consumption - ore price increase", but it will eventually return to the oversupply fundamentals. The futures market in the second half of the year is expected to be divided into two stages: the futures price will rise in the early third quarter due to improved macro sentiment, supply disruptions, and better - than - expected off - season performance; it will fall in the fourth quarter due to the end of technical upgrades and increased production. Strategy suggestions are to conduct a long - short spread trade between LC2509 and LC2511 and to short LC2511 at high prices [3]. 3. Summary by Directory 3.1 Futures Data - **Price Range Forecast**: The price of the lithium carbonate futures main contract is expected to fluctuate between 59,000 - 62,000 yuan/ton, with a current 20 - day rolling volatility of 21.1% and a historical percentile of 25.9% over three years [2]. - **Daily Changes**: The closing price of the lithium carbonate futures main contract was 64,400 yuan/ton, up 520 yuan or 0.81% from the previous day; trading volume was 350,125 lots, down 195,280 lots or 35.80%; open interest was 326,895 lots, down 11,139 lots or 3.30%. For the LC2511 contract, the closing price was 64,080 yuan/ton, up 540 yuan or 0.85%; trading volume was 30,581 lots, down 24,591 lots or 44.57%; open interest was 94,359 lots, down 746 lots or 0.78% [9]. - **Monthly Spread Changes**: The LC08 - 11 spread was 600 yuan/ton, down 100 yuan or 14.29%; the LC09 - 11 spread was 320 yuan/ton, down 20 yuan or 6%; the LC11 - 12 spread was - 100 yuan/ton, up 100 yuan or - 50% [12]. 3.2 Spot Data - **Lithium Ore Quotes**: The average price of lithium mica (Li2O: 2 - 2.5%) was 1,385 yuan/ton, up 30 yuan or 2.21%; for Li2O: 3 - 4%, it was 2,515 yuan/ton, up 35 yuan or 1.41%; for Li2O: 5 - 5.5%, it was 4,950 yuan/ton, up 50 yuan or 1.02%. The average price of lithium spodumene (Li2O: 6%, Brazil CIF) was 670 US dollars/ton, up 5 US dollars or 0.75%; for Australian ore CIF, it was also 670 US dollars/ton, up 5 US dollars or 0.75%; for fastmarkets, it was 670 US dollars/ton, up 10 US dollars or 1.51%. The average price of amblygonite (Li2O: 6 - 7%) was 4,500 yuan/ton, up 75 yuan or 1.69%. The US dollar - to - RMB exchange rate was 7.1741, down 0.0008 or - 0.01% [16]. - **Carbon/Hydrogen Lithium Quotes**: The average price of industrial - grade lithium carbonate was 61,700 yuan/ton, up 400 yuan or 0.65%; for battery - grade lithium carbonate, it was 63,300 yuan/ton, up 400 yuan or 0.64%. The average price of industrial - grade lithium hydroxide was 51,970 yuan/ton, down 50 yuan or - 0.1%; for battery - grade lithium hydroxide (micropowder), it was 62,620 yuan/ton, down 50 yuan or - 0.08%; for battery - grade lithium hydroxide (CIF in China, Japan, and South Korea), it was 8.05 US dollars/kg, down 0.05 US dollars or - 0.62%; for fastmarkets, it was 8.05 US dollars/kg, unchanged [20]. - **Lithium Industry Chain Spot Spreads**: The battery - grade lithium carbonate - industrial - grade lithium carbonate spread was 1,600 yuan/ton, unchanged; the battery - grade lithium hydroxide - battery - grade lithium carbonate spread was - 280 yuan/ton, down 400 yuan or - 333.33%; the spread between battery - grade lithium hydroxide CIF in Japan and South Korea and the domestic price was 114.87 yuan/ton, down 284.99 yuan or - 71.27% [24]. - **Downstream Quotes**: The average price of power - type lithium iron phosphate was 30,950 yuan/ton, up 100 yuan or 0.32%; for low - end energy - storage type, it was 27,280 yuan/ton, up 90 yuan or 0.33%; for mid - to - high - end energy - storage type, it was 29,520 yuan/ton, up 95 yuan or 0.32%. The average price of lithium manganese iron phosphate was 43,100 yuan/ton, up 50 yuan or 0.12%. For ternary materials, the 523 (consumer - type) was 105,960 yuan/ton, up 100 yuan or 0%; the 622 (consumer - type) was 111,020 yuan/ton, unchanged; the 811 (power - type) was 142,780 yuan/ton, up 20 yuan or 0.01%. The average price of lithium hexafluorophosphate was 51,550 yuan/ton, unchanged. For electrolyte, the price for lithium iron phosphate use was 17,950 yuan/ton, unchanged; for iron - lithium energy - storage use, it was 17,050 yuan/ton, unchanged; for iron - lithium power use, it was 19,450 yuan/ton, unchanged; for ternary power use, it was 21,900 yuan/ton, unchanged [26][27]. 3.3 Basis and Warehouse Receipt Data - **Basis Quotes**: For the LC2507 contract, the basis of Shengxin Lithium Energy was 400 yuan/ton; Tianqi Lithium Industry, Ganfeng Lithium, and Tianyi Lithium Industry were 500 yuan/ton; Jiangxi Jiuling and Yongxing Materials were 300 yuan/ton; Zhongkuang Resources was 400 yuan/ton; Ruifu Lithium Industry was 100 yuan/ton; Zhejiang New Era was 0 yuan/ton; for Lanke Lithium Industry (quasi - electric), it was - 300 yuan/ton; for industrial - grade, it was - 400 yuan/ton. The comprehensive basis quote for the four materials was 162.5 yuan/ton [30]. - **Warehouse Receipt Data**: The total number of warehouse receipts was 13,281, an increase of 626 from the previous day. There were changes in the warehouse receipts of some warehouses, such as an increase of 652 in Jiuling Lithium Industry (Yichun Yifeng), a decrease of 180 in Jiangsu Bennigang Wharf, etc [35]. 3.4 Cost and Profit The report presents the production profit trends of lithium carbonate from purchased lithium spodumene concentrate (Li₂O: 6%) and lithium mica concentrate (Li₂O: 2.5%), as well as the theoretical delivery profit and import profit trends of lithium carbonate, but no specific data values are summarized here [33].

Report Industry Investment Rating - Not provided in the documents Core Viewpoints - The supply of domestic lithium carbonate in June 2025 is expected to be loose, and the social inventory has increased month - on - month. The price of lithium carbonate may first strengthen and then weaken. It is recommended that investors wait and see, paying attention to the support level around 53,000 - 58,000 and the pressure level around 63,000 - 68,000 [1][4] Summary by Relevant Catalogs Lithium Carbonate Futures Market - **Prices**: On June 11, 2025, the closing prices of the near - month, continuous - one, continuous - two, and continuous - three contracts of lithium carbonate futures were 61,700 yuan/ton, 61,680 yuan/ton, 61,740 yuan/ton, and 61,740 yuan/ton respectively, showing an increase compared to the previous day [1] - **Trading Volume and Open Interest**: The trading volume of the active contract on June 11 was 236,197 lots, an increase of 31,417 lots compared to the previous day, and the open interest was 178,235 lots, a decrease of 16,496 lots [1] - **Inventory**: The inventory on June 11 was 32,837 tons, a decrease of 110 tons compared to the previous day [1] - **Spreads and Basis**: The spread between the near - month and continuous - one contracts was 20 yuan/ton, a decrease of 220 yuan/ton compared to the previous day. The basis (SMM battery - grade lithium carbonate average price - lithium carbonate active contract closing price) was - 1,180 yuan/ton, a decrease of 770 yuan/ton [1] Lithium and Related Product Spot Prices - **Lithium Ore**: The average price of spodumene concentrate (6%, CIF China) on June 11 was 630 US dollars/ton, an increase of 2 US dollars/ton compared to the previous day. The average prices of different grades of lithium mica also showed varying degrees of increase [1] - **Lithium Compounds**: The average price of battery - grade lithium carbonate (99.5%, domestic) was 60,500 yuan/ton, an increase of 150 yuan/ton. The average price of battery - grade lithium hydroxide (56.5%, domestic) decreased by 300 yuan/ton [1] - **Other Products**: The prices of products such as ternary precursors, ternary materials, and lithium iron phosphate also had different trends, with some prices decreasing slightly [1] Company News - **Lingling Precision**: Its subsidiary Jiangxi Shenghua revised the original "Business Cooperation Agreement" with CATL, increasing the production capacity in Jiangxi to 160,000 tons/year and the production and sales in Sichuan Phase III to 200,000 tons/year. CATL promised to purchase no less than 30% of Jiangxi Shenghua's committed production capacity annually, which is expected to enhance the competitiveness of the lithium iron phosphate cathode material business [2] - **Xintai Co., Ltd.**: Its 10,000 - ton lithium salt project in Indonesia has been in trial production since 2025, and the certification of some core customers is in the final stage, with mass production expected in the third quarter. The company has a business layout in metal gallium for solid - state batteries [2] Supply and Demand Situation - **Lithium Carbonate Supply**: Tianqi Lithium's 30,000 - ton wet - process project may be put into production in January 2026, increasing the total production capacity to 2.01 million tons/year. The production and import of domestic lithium ore in June may change, and some production lines are under maintenance or capacity conversion. The production profit of some lithium carbonate production methods is negative [3] - **Lithium Hydroxide Supply**: The production and inventory of lithium hydroxide in June may change, with the production profit of some production methods being negative, and the export volume may increase [3] - **Lithium Iron Phosphate Supply**: The production and inventory of lithium iron phosphate in June may increase, and many projects are under construction or planned to be put into production [3] Investment Strategy - It is recommended that investors wait and see, paying attention to the support level around 53,000 - 58,000 and the pressure level around 63,000 - 68,000 due to the complex supply - demand situation and price trends [4]