CMSC: Lithium battery production exceeded expectations, fluorine prices expected to continue rising.

CMSC released a research report stating that the supply and demand of hexafluoride is currently in a tight balance, and if the industry continues to grow next year, there may be a supply and demand gap. The company believes that the current price of lithium hexafluorophosphate is expected to continue to rise. Considering that top energy storage companies have ample orders for this year and next year, the strong production in energy storage is expected to continue. From the surface supply and demand situation, the supply and demand of hexafluoride will be in a tight balance in the next few months, and considering the continued growth in demand next year, there may be a supply and demand gap for hexafluoride next year. In conclusion, the company predicts a sustained upward trend in the price of hexafluoride. CMSC's main points are as follows: Strong downstream demand, lithium battery production data continues to exceed expectations Industry feedback shows that lithium battery production in Q3 2025 is still expected to grow by over 15% on a month-on-month basis. Some segments with relatively orderly patterns, after more than 2 years of decline, are starting to see an upward turn in prices. Among them, the price trend of lithium hexafluorophosphate may be relatively leading, as the top three companies in this segment have a market share of nearly 70%, high concentration, and only a few companies such as Tianci are currently profitable at the current hexafluoride prices, while second and third-tier companies are generally losing money, with some small companies shutting down for an extended period of time. Recently, the open market price of hexafluoride has risen to 58,000 yuan/ton. The top three companies are currently at full production capacity, with production expected to continue to rise in the coming months. The supply and demand of hexafluoride is currently in a tight balance, and if the industry continues to grow next year, there may be a supply and demand gap. The company believes that the current price of lithium hexafluorophosphate is expected to continue to rise. Turnaround in the price of 6F Recently, the price of lithium hexafluorophosphate has seen a slight increase, with open prices reaching 55,000-58,500 yuan/ton, an increase of over 8,000 yuan/ton from the bottom. Industry feedback indicates that some large companies have temporarily suspended their quotes. The company believes that the price of lithium hexafluorophosphate is expected to continue to rise in the future, and this increase is not only due to fluctuations in lithium carbonate prices, with a cost increase of around 3,000-5,000 yuan/ton, but more due to changes in supply and demand. With the price increase of hexafluoride, prices of high-end products such as FSI are also expected to rise. Energy storage demand exceeds expectations, lithium battery production continues to strengthen Industry feedback shows that the top battery cell companies in the lithium battery industry are at full capacity for energy storage production, and prices of some energy storage battery cells have started to rise. Global energy storage battery shipments reached 240GWh in the first half of this year, a year-on-year increase of 106%. This is mainly due to the shift in the domestic energy storage market from strong matching to market-based competition. Quality energy storage products are beginning to be scarce. In addition, with the expected interest rate cuts and tariff reductions, the US energy storage market is also entering a period of inventory preparation. Considering that top energy storage companies have ample orders for this year and next year, the strong production in energy storage is expected to continue. Recovery of 6F supply and demand, tight capacity of top companies The nominal capacity utilization rate of the 6F industry has reached 70%, and feedback from the industry indicates that the capacity utilization rate of the top three companies is at full capacity. Although there is idle capacity in the tail end, under the current prices, there is significant losses and low willingness to operate. Currently, only a small amount of capacity has been added by Shilei this year. From the surface supply and demand situation, the supply and demand of hexafluoride will be in a tight balance in the next few months, and considering the continued growth in demand next year, there may be a supply and demand gap for hexafluoride next year. In conclusion, the company predicts a sustained upward trend in the price of hexafluoride. Risk warning: downstream demand falls below expectations, new capacity is put into operation too quickly or climbs steeply.