Zhongjin: PVDF prices are on the rise, the lithium battery market in 2026 is promising.

CICC released a research report stating that assuming production in November and December remains stable compared to the previous month, the bank estimates that China's demand for lithium-grade PVDF in 2025 will be about 78,700 tons (YoY +65.4%), and if the growth rate remains the same in 2026, demand is expected to reach 110,000 tons. The strong demand for lithium batteries is expected to continue, and there is potential for PVDF price increases. The bank recommends DONGYUE GROUP (00189), Haohua Chemical Science & Technology Corp., (600378.SH), Zhejiang Juhua (600160.SH), among others. CICC's main points are as follows: Industry Overview According to Pacific Securities data, as of November 20th, the mainstream market price of PVDF has increased from 49,000 yuan/ton at the beginning of November to the current 52,000 yuan/ton. According to Xingteng Information data, as of November 20th, the market average prices for lithium iron phosphate/tri-element/separating membrane-coated PVDF were 60,000/119,500/182,000 yuan/ton respectively, with increases of 3,500/0/10,000 yuan/ton from the mid-year lows, indicating an upward trend in PVDF prices. Strong demand for lithium batteries may lead to temporary supply-demand mismatch PVDF downstream mainly includes lithium batteries, photovoltaics, coatings, water films, etc. According to Xingteng lithium battery data, China's total installed capacity of lithium iron phosphate batteries reached 1,240GWh from January to October 2025, while that of lithium-ion batteries reached 265GWh. Assuming production in November and December remains stable, the bank estimates that China's demand for lithium-grade PVDF in 2025 will be about 78,700 tons (YoY +65.4%), and if the growth rate remains the same in 2026, demand is expected to reach 110,000 tons. According to Pacific Securities data, the current overall operating rate of the PVDF industry is around 70%, taking into account the lower operating rate of coating-grade PVDF, the capacity of lithium-grade PVDF may be close to full capacity, leading to a temporary supply-demand mismatch in 2026. Actual new capacity may be lower than expected After the rapid increase in PVDF prices in 2020-2021, more companies have entered the market. According to Pacific Securities data, the effective capacity of the PVDF industry is about 180,000 tons, with a nominal new capacity of 157,000 tons. The bank believes that similar to lithium hexafluorophosphate, PVDF is one of the lithium battery materials with nominal new capacity significantly higher than effective new capacity. The supply chain for lithium-grade PVDF has high barriers to entry, and actual suppliers may include Fulonglin, Guangdong Hec Technology Holding, DONGYUE GROUP, Haohua Chemical Science & Technology Corp., Shanghai Huayi Group Corporation, Zhejiang Juhua, Lianchuang Corporation, Shandong Deyi, Ningxia Fluroride Peak, among others. The bank believes that there is a clear trend towards the concentration of the top players in the supply chain of lithium battery materials, with new effective capacity concentrating on capacity expansion and technical upgrades by existing suppliers, leading to actual supply increment significantly lower than expected.