Hong Kong stock concept tracking | Energy storage market eruption Lithium battery material demand rises rapidly (with concept stocks)

Since the third quarter of this year, the explosion of the energy storage market has driven a rapid increase in demand for lithium battery materials. Prices of lithium battery materials such as lithium hexafluorophosphate, lithium iron phosphate, and lithium carbonate have risen significantly, with the lithium battery materials sector becoming the "number one star" in the recent A-share market. An official from a carbon lithium carbonate production enterprise in Sichuan province told reporters that market demand has indeed been strong recently, and even with full capacity, they cannot meet customer demands. Long-term customers are staying in hotels near the company just to get deliveries, and they even said, "produce one ton, take one ton away." "From a technical perspective, lithium iron phosphate batteries account for over 97% of installations in new energy storage, and have an absolute dominant position." Some industry insiders familiar with the energy storage industry believe that energy storage is becoming a new growth driver for lithium battery demand, and that the energy storage "feast" may have just begun. At the "10th International Summit on Power Battery Applications," Ganfeng Lithium Group Chairman Li Liangbin stated that by 2025, global demand for lithium carbonate will reach 1.45 million tons. Due to increased demand in the second half of the year, the projected annual demand has been updated to 1.55 million tons. Meanwhile, the supply capacity is over 1.7 million tons, with an excess of about 200,000 tons, leading to lower prices this year. Li predicts that by 2026, demand for lithium carbonate will increase by 30% to 1.9 million tons, and with supply capacity also increasing by about 250,000 tons, there will be a basic balance between supply and demand, with potential for lithium carbonate prices to rise. If demand growth exceeds 30% next year, reaching even 40%, there may be a temporary imbalance in supply, causing prices to potentially exceed 150,000 yuan per ton or even 200,000 yuan per ton. Last week, Beijing HyperStrong Technology signed a 3-year 200GWh contract with Contemporary Amperex Technology, confirming the scarcity logic of energy storage batteries. Excess profits in the downstream investment and operation stages of energy storage will be transferred through price increases upstream to materials, batteries, and integration as demand grows rapidly, with all these stages offering opportunities for increased profits. China Securities Co., Ltd. believes that excess profits in the downstream investment and operation stages of energy storage will be transferred upstream to materials, batteries, and integration as demand grows rapidly, providing significant flexibility in the lithium battery industry chain. China Securities Co., Ltd. continues to be optimistic about opportunities in materials, especially 6F, iron lithium, negative electrodes, separators, and battery segments. The following areas of focus are: 1) Prices of materials and energy storage batteries continue to rise due to high demand during the production peak season. 2) As downstream purchasing and long-term order guidance in October/November point to clearer demand for 2026. 3) Changes in pricing models. Hong Kong stocks related to the lithium battery and energy storage industry chain: Lithium battery materials: Ganfeng Lithium Group (01772), Tianqi Lithium Corporation (09696), Zhongwei New Materials (02579), Jiangsu Lopal Tech. Group(02465) Energy storage: Contemporary Amperex Technology (03750), BYD Company Limited (01211), CALB (03931), Ruipulan (00666)