[SMM Analysis] September demand growth fell short of expectations, and the increase in electrolyte production narrowed

In September 2026, despite simultaneous expansion on both the supply and demand sides of China's electrolyte industry, market sentiment still improved somewhat, though the growth rate narrowed significantly from the previous month. According to available data, China's total electrolyte production in September rose about 2.8% MoM from August and increased about 66% YoY.

Electrolyte downstream demand and production in September maintained positive growth, but overall performance fell short of market expectations. Demand side, the energy storage sector continued its high prosperity, with battery cell capacity ramping up and production steadily rising, serving as a key support for electrolyte demand. The EV sector showed significant divergence: low and mid-end car models equipped with LFP batteries demonstrated strong sales resilience, coupled with robust demand for models featuring the second-generation blade battery, providing solid support. However, sales of high-end ternary extended-range models were relatively weak, dragging down the overall NEV market, with the auto market exhibiting an "underperform in peak season" characteristic. Meanwhile, affected by consumption tax factors, some September-October orders were front-loaded to August production schedules, compressing the growth space for September battery cells. Even with some National Day holiday orders organized for early production, the MoM growth rate of electrolyte production still slowed.

Looking ahead, in October, driven by the traditional "October peak season," downstream demand is expected to recover further. Energy storage demand is expected to remain steady and improving. The EV sector may experience a phased export rush due to restrictions on hybrid models exported to Europe. However, since some orders originally scheduled for the National Day holiday period in October have already been front-loaded to September production, electrolyte production is expected to continue rising, though the growth magnitude will be relatively limited.

Note: If you have any supplements or corrections regarding the details mentioned in this article, please feel free to contact us. Contact information is as follows:

Tel: 021-20707858 Hu Xuejie, Thank you!

                                               
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