[SMM Analysis] Strong Demand, Limited Supply, LiPF6 Market Maintains Tight Balance

In August 2026, China's LiPF6 production continued to edge up, rising about 3% MoM from July and up about 65% YoY. Overall supply release pace lagged demand, sustaining a tight supply-demand balance.

Demand side, entering August, the growth rate of downstream electrolyte production further expanded, providing a strong boost to LiPF6 procurement demand and serving as the core driver of market prosperity. Supply side, however, although LiPF6 prices continued to rise, overall growth remained limited.

First, supply-side growth is constrained and struggles to match demand. Most manufacturers are currently running near full capacity, and some new capacity remains in the ramp-up stage with limited release. Additionally, some units have entered periodic maintenance, further restricting room for output expansion.

Second, room for high-price transactions is limited, and price increases provide insufficient stimulus. Under long-term contract orders and preferential supply mechanisms for major clients, only a small volume of spot orders can actually be transacted at relatively high market prices. Moreover, the transmission of price increases downstream to battery cell makers is not yet sufficient, and midstream electrolyte producers have limited short-term acceptance of higher raw material prices, weakening LiPF6 producers' incentive to rapidly expand output.

Looking ahead, in September, as the "September-October peak season" for auto sales officially begins, demand is expected to see concentrated release. Power battery cell production schedules are expected to grow further, and with the resonance of peak energy storage shipments and continued production line ramp-up, both the power and energy storage sectors will drive electrolyte production higher as orders increase, providing sustained support for LiPF6 demand. However, supply-side growth still faces constraints: on one hand, some producers remain under maintenance, and new capacity ramp-up is slow; on the other hand, integrated LiPF6-electrolyte enterprises primarily arrange LiPF6 production based on their own electrolyte orders, and without significant growth in electrolyte orders, their LiPF6 growth is also limited. Overall, China's LiPF6 production growth in September is expected to remain slow, and the tight supply-demand balance is likely to persist.

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SMM New Energy Research Team

Wang Cong 021-51666838

Ma Rui 021-51595780

Feng Disheng 021-51666714

Lyu Yanlin 021-20707875

Zhang Haohan 021-51666752

Wang Zihan 021-51666914

Wang Jie 021-51595902

Xu Yang 021-51666760

Xu Mengqi 021-20707868

Hu Xuejie 021-20707858