The New Energy Lithium Battery Industry Chain Rings the Bell for Value Restoration

After two years of in-depth adjustment, the lithium battery industry is stepping into a new phase of development. As the price of battery-grade lithium carbonate in the upstream has rebounded steadily, the supply-demand structure in the midstream materials sector has quietly reversed, and downstream battery manufacturers have maintained robust order books, a cyclical recovery spanning the entire "lithium ore – materials – batteries" chain has kicked off.

What is the core driver behind this round of recovery in the lithium battery industry chain? How can all links in the chain seize this strategic window of opportunity? With these questions in mind, reporters from Securities Daily recently went deep into the frontlines of the industry, interviewed practitioners, and observed emerging trends, aiming to uncover the internal logic and future trajectory of the lithium battery industry's transition from hitting bottom to gaining momentum.

Clear Signals of Recovery

The lithium battery industry chain includes upstream lithium ore mining and raw materials such as lithium carbonate, midstream manufacturing of key materials like cathode materials (e.g., lithium iron phosphate), anode materials, electrolytes, and separators, as well as downstream end applications including power batteries, energy storage batteries, and consumer electronics.

Since December last year, the prosperity of all links in the industrial chain has risen in tandem, ushering in a much-anticipated "warming trend". Among them, lithium hexafluorophosphate, a core raw material for electrolytes, has emerged as the "vanguard" of this recovery, with production lines at many enterprises operating at full capacity and order books well-stocked. Listed companies predict that product prices will likely continue their upward trend in 2026.

Beyond the electrolyte segment, prices of raw materials for cathode materials, separators, and anode materials have also seen upward movement.

"Overall, the lithium battery industry has moved from a period of in-depth adjustment to a phase of 'early recovery – warming and upward growth'," said He Zhuoxin, a researcher at the China Chemical and Physical Power Sources Industry Association, in an interview with Securities Daily. He pointed out that landmark signals include: the expansion of energy storage market orders driving a comprehensive rebound in lithium battery material prices and production scheduling, rapid inventory destocking across the industrial chain, improved performance of leading companies, and a rise in the overall prosperity of the sector. On the demand side, in addition to the sustained high-speed growth of the new energy vehicle and energy storage markets, the emergence of emerging scenarios such as low-altitude economy and humanoid robots has opened up new growth curves for the lithium battery industry.

As a core raw material for manufacturing lithium battery cathode materials, the price of battery-grade lithium carbonate staged a notable V-shaped rebound in 2025. In June 2025, its price once fell below 60,000 yuan per ton, then entered a volatile upward channel; by November of the same year, it broke through the 100,000 yuan per ton mark, surging by over 60% in less than six months. On January 8, 2026, data from Mysteel showed that the daily price of MMLC battery-grade lithium carbonate rose by 1,750 yuan per ton from the previous day, with the midpoint price quoted at 140,300 yuan per ton.

Leading enterprises' optimistic expectations are gradually forming a consensus. Li Liangbin, Chairman of Ganfeng Lithium, stated publicly that the demand for battery-grade lithium carbonate is expected to grow by 30% in 2026, when supply and demand will be basically balanced and prices still have room for further increase; if demand growth exceeds 30%, prices may rise to the range of 150,000 yuan to 200,000 yuan per ton. Jiang Anqi, Chairman of Tianqi Lithium, also said publicly that driven by demand from renewable energy grid connection, commercial heavy truck electrification, etc., the global lithium demand is expected to reach 2 million tons in 2026.

The industry generally believes that after a period of adjustment, the lithium battery industry is entering a new cycle of prosperity. However, the degree of matching between production capacity and demand, as well as inventory digestion, will remain key variables affecting the industry's sustained and healthy recovery.

Long-termism Becomes a Consensus

Along with industrial recovery comes cost pressure brought by rising upstream material prices. To address this, enterprises are actively seeking solutions. On the technical cost reduction front, some listed companies are controlling costs through process optimization, raw material self-supply, and other means; price increases have become a direct choice for some leading enterprises.

Recently, a battery manufacturer stated explicitly in its product price adjustment notice that since November 2025, prices of core raw materials for lithium batteries have seen structural sharp increases, and the company has decided to raise the selling price of battery products by 15% based on the current prices.

Several leading lithium iron phosphate cathode material manufacturers have also put forward price increase demands. It is understood that the new annual price negotiations in the lithium iron phosphate industry have achieved substantial progress. Negotiations on processing fees between lithium iron phosphate producers and downstream major customers are still ongoing, while other customers have basically accepted the new round of price adjustment plans, with an increase range of 1,000 yuan per ton.

When verifying with some enterprises, reporters from Securities Daily found that even facing significant cost pressure from rising raw material prices, leading enterprises still occupy a dominant position in the market by virtue of their production capacity advantages and order reserves. Currently, prices of cathode materials such as lithium iron phosphate and battery-grade lithium carbonate continue to rise, leading enterprises have full order schedules, and high-end production capacity is in short supply. The industry pattern has shifted from the past "buyer-dominated" model to a "structural seller's market" under supply-demand game.

Against this backdrop, the development logic of the lithium battery industry chain is undergoing profound changes. Enterprises are no longer obsessed with the "production capacity race" for scale expansion, but instead shift to "value-intensive cultivation" focusing on technological upgrading and supply chain resilience building. Long-termism has gradually become a consensus for the coordinated development of upstream and downstream in the industrial chain.

Enterprises are also keeping pace with corresponding layout adjustments. For example, at the end of October 2025, Xiangtan Electrochemical Energy Technology Co., Ltd. and GEM Co., Ltd. signed a three-year strategic cooperation framework agreement. A relevant person in charge of Xiangtan Electrochemical Energy Technology Co., Ltd. stated that the new energy vehicle industry is still in a stage of rapid development, with sustained growth in demand for power battery cathode materials. In the first three quarters of 2025, the company's sales volume of power battery cathode materials (including ternary materials, lithium iron phosphate, etc.) reached 53,000 tons, a year-on-year increase of 36.29%. "The company's capacity expansion plan will be advanced in accordance with market demand, while adhering to R&D investment to drive performance growth through technological innovation."

"At present, leading enterprises have carried out practices in technical cost reduction fields such as integrated layout and hedging, but the industry as a whole still needs to pay attention to the impact of price fluctuations on profits," He Zhuoxin suggested. Enterprises can respond to industry fluctuations through two major paths: first, use financial tools such as futures and options to carry out risk management; second, achieve cost reduction and efficiency improvement through resource integration and vertical integration – on the one hand, increase resource self-sufficiency rate, promote the integrated layout of "lithium ore + lithium salt", and reduce dependence on external procurement and the risk of raw material price fluctuation transmission; on the other hand, continuously optimize processes, control energy consumption, upgrade supply chains, and strengthen pressure resistance during low-price cycles.

He Zhuoxin believes that in the medium and long term, the expansion of energy storage installed capacity and the development of overseas businesses will bring incremental demand. The resonance of policy dividends and technological iteration will further enhance the resilience of the industry.

Profit Pattern Expected to Be Reshaped

Overall, the "roller-coaster" market performance of the lithium battery industry has shown obvious cyclical characteristics, directly affecting supply-demand dynamics, prices, and the profit pattern of enterprises.

Mo Ke, founder of Zhenli Research, stated that the industry is currently experiencing significant differentiation at the micro level: leading enterprises are swamped with orders and their profits are climbing steadily, while most mid-tier enterprises are trapped in a situation of "increasing revenue without increasing profits".

This differentiation indicates that the industry is moving towards a new round of reshuffling. Liu Yan, Chairman of Anhui Anjue Asset Management Co., Ltd., analyzed that in the medium and long term, the huge demand for global new energy vehicles and energy storage will accelerate the clearance of low-quality production capacity, driving the concentration of resources and orders towards leading and integrated enterprises.

From the supply side, the operating rates of major lithium salt enterprises are currently maintained at a high level, with production capacity utilization rates continuously improving. Industry insiders said that the cost of lithium extraction from salt lakes (30,000 yuan to 40,000 yuan per ton) is significantly lower than that of processing imported spodumene concentrate (60,000 yuan to 80,000 yuan per ton). This gives salt lake lithium extraction manufacturers a significant cost advantage during the lithium carbonate price increase cycle, enabling them to achieve higher profit margins. This will bring more abundant cash flow to salt lake lithium extraction enterprises, supporting them to further carry out technological R&D and capacity expansion.

As the profit pattern of the lithium battery industry is expected to be reshaped, "anti-involution" has also become an inherent requirement for the sustained and healthy development of the industrial chain. On January 7, the Ministry of Industry and Information Technology and other departments jointly held a forum on the power and energy storage lithium battery industry, deploying issues such as regulating industrial competition order and promoting high-quality development. This marks a further escalation of "anti-involution" in the lithium battery industry, providing clear guidance for the industry to shift from scale expansion to quality improvement.

Mo Ke stated that whether industrial chain enterprises can achieve profitability in 2026 lies in this industry-wide "value restoration" campaign.

In summary, the lithium battery industry is moving from a bottom cycle dominated by price games to a new cycle driven by value. Technological innovation has replaced production capacity scale as the core factor determining future profit distribution. Adhering to long-termism and focusing on value creation will be the core code for enterprises to weather the cycles.