Minmetals Securities: Improvement in supply and demand in the lithium battery materials industry, the tight balance of industry supply and demand is expected to continue.

Minmetals Securities research report stated that, according to Minmetals Securities' analysis of the third quarter reports of lithium battery materials companies listed in 2025, the main changes in the industry are as follows: looking at the four supply-side elements, profitability situation, in the third quarter of 2025, overall losses in various sectors were minimal, with some sectors turning losses around for the first time, but profitability in some sectors remains poor; in terms of capital expenditure, the growth rate of capital expenditure at various stages increased compared to the previous year; looking at cash flow, the industry's cash flow situation has slightly improved, but Ningde Times still holds a large proportion. From the perspective of inventory, the current inventory levels are relatively reasonable, with the inventory/assets ratio increasing compared to the previous quarter of 2025. From the demand side, energy storage demand exceeded expectations, with global energy storage battery shipments reaching 428GWh from January to September 2025, a 90.7% increase year-on-year. From January to September, China's cumulative sales of power and other batteries reached 1067.2GWh, a cumulative year-on-year increase of 55.8%. Looking at the supply and demand side: Some links saw price increases during the peak demand season of 2025, with leading companies facing capacity constraints, leading to a tight supply and demand balance. Looking forward to 2026, energy storage demand is expected to exceed expectations, combined with sustained high growth in power demand, the tight supply and demand balance is expected to continue and strengthen. Comprehensively assessing industry trends: Based on the considerations of various factors in the third quarter of 2025, Minmetals Securities believes that the supply and demand situation in the lithium battery materials industry is improving, with the industry's supply and demand balance expected to continue, extending the new cycle.