Domestic demand gradually pulled back in February, with ESS battery cell production down 10% MoM.

In February, China's ESS battery cell production decreased 10% MoM but was up 213% YoY. Demand side, China entered the off-season for ESS demand in February. Additionally, as the battery cell demand driven by overseas rush for installations was nearing the end of delivery, the overall market demand for ESS showed a weakening trend. Supply side, weakened demand combined with the impact of the Chinese New Year holiday led to a slight decline in ESS battery cell production. In March, although domestic demand is expected to gradually recover, the previous overseas rush for installations has resulted in some demand being released in advance, causing the overall growth rate of battery cell demand to slow compared to previous years. It is anticipated that ESS battery cell production will see only a slight increase. In March, China's ESS battery cell production is expected to increase 10% MoM and 61% YoY.