CITIC Construction Investment: Optimistic about the Electrolyte Industry Chain Represented by 6F and VC Welcoming Profit Restructuring under the New Lithium Battery Cycle

CITIC Construction Investment points out that under the nonlinear growth of energy storage demand, a new cycle for lithium batteries is becoming increasingly clear. On the demand side, global lithium battery demand is expected to reach 3,065 GWh by 2026, a year-on-year increase of 33.7%, driving rapid growth in electrolyte demand. Considering supply and demand, it is expected that 6F and VC will be in tight balance in 2026, while supply conditions for other electrolyte segments are likely to improve. At the same time, solvent prices are also expected to return to reasonable levels. We are optimistic about the new lithium battery cycle, with the electrolyte industry chain represented by 6F and VC undergoing profit restructuring, with a particular focus on 6F and VC segments.

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CITIC Construction Investment: Spring Breeze Brings Warm Currents, 6F/VC as the Focus

Under the nonlinear growth of energy storage demand, a new cycle for lithium batteries is becoming increasingly clear. The core logic of this cycle lies in the resonance between the rising penetration rate of new energy generation and the decreasing costs of energy storage systems. The key drivers include the full market entry of new energy promoted by Document No. 136, the widening peak-valley price gap, and the issuance of Document No. 114, which clarifies the capacity electricity price for energy storage, providing stable revenue expectations for energy storage.

On the demand side, we expect global lithium battery demand to reach 3,065 GWh by 2026, a 33.7% increase year-on-year, corresponding to electrolyte demand of 3.67 million tons, with 6F at 404,000 tons, EC at 917,000 tons, EMC at 822,000 tons, DMC at 1.013 million tons, VC at 110,000 tons, and FEC at 44,000 tons.

On the supply side, our estimates indicate that effective capacity for 6F will be approximately 345,000/414,000 tons in 2025/2026; EC effective capacity will be about 936,000/1,106,000 tons; DMC effective capacity will be around 903,000/1,290,000 tons; EMC effective capacity will be approximately 1,085,000/1,135,000 tons; VC effective capacity will be 79,000/114,000 tons; and FEC effective capacity will be about 40,000/57,000 tons.

Considering supply and demand, it is expected that 6F and VC will be in tight balance in 2026, while other segments may see supply conditions improve. Quarterly analysis shows that shortages for 6F will occur in the second half of 2026, and VC will remain in tight balance throughout the year. Other segments are expected to experience supply-demand tightening in Q4 2026. Demand in Q1 2026 is relatively weak due to seasonal factors, but as demand picks up in Q2 and Q3, prices for 6F and VC are expected to remain high. The solvent supply-demand relationship is also expected to improve significantly, with solvent prices likely to recover to reasonable profit levels.

We are optimistic about the new lithium battery cycle, with the electrolyte industry chain represented by 6F and VC undergoing profit restructuring, with a particular emphasis on 6F and VC segments.

(Source: People’s Financial News)