[SMM Analysis] Market Production and Sales at Peak, Separator Prices Were Largely Stable in October

In October, the prices of lithium battery separators in China fluctuated downward. In Q4, the production schedule of downstream battery cells exceeded expectations, leading to further growth in demand for key materials like separators. Separator production continued to rise, and the operating rate of separator companies increased. Currently, downstream demand is robust, and to ensure production, there are few price suppression actions. Separator companies maintain a high production schedule, focusing on delivery assurance with minimal price-cutting actions, resulting in largely stable separator prices.

In November, demand side, downstream rush for installations remains high, with robust demand in both the power and energy storage sectors, which is transmitted to upstream separator companies, leading to further growth in separator production. Supply side, year-end new capacity release of separator companies slows down, and demand growth drives an increase in the operating rate of companies. This brings a slight cost reduction through economies of scale. However, considering that both upstream and downstream companies are primarily focused on ensuring delivery and installations, attention to prices has decreased. Therefore, the slight decline in separator costs is unlikely to bring significant price changes, making a notable drop in separator prices unlikely.