[SMM Analysis] This article introduces knowledge related to energy storage in a straightforward manner by addressing three questions: What is energy storage? Why do we need energy storage? How is energy storage implemented? At its core, energy storage is a technological system designed to address the temporal and spatial mismatches in electricity supply and demand, enabling the transfer of energy across time through forms such as chemical energy (e.g., batteries) and potential energy (e.g., pumped hydro storage). Its core architecture comprises four major modules: energy storage battery cells serve as the energy carriers, with the LFP route dominating the market; PCS converters facilitate AC-DC conversion; the BMS system monitors the safety of tens of thousands of battery cells in real time; and the EMS system optimizes charging and discharging strategies based on electricity price signals. The primary demand for energy storage covers the power generation and grid side, as well as the demand side. Current technological iterations focus on large-capacity battery cells, such as the 587Ah cell from CATL and the 684Ah cell used in combination by Sungrow.

Recently, the China Automotive Power Battery Industry Innovation Alliance released the monthly data for power batteries in May 2025. The data shows that in May, China's power battery installations reached 57.1 GWh, up 5.5% MoM and 43.1% YoY. From January to May, China's cumulative power battery installations amounted to 241.4 GWh, up 50.4% YoY.

[SMM Cobalt and Lithium Morning Meeting Summary: On Monday, ternary prices continued their downward trend. In terms of raw material costs, cobalt sulphate and manganese sulphate prices dropped slightly, while nickel sulphate remained stable temporarily. Lithium carbonate and lithium hydroxide continued to show a downward trend. On the NEV market side, June is traditionally the off-season for the NEV market, with mediocre performance in auto sales. However, some leading battery cell manufacturers have seen a significant increase in procurement demand for medium- and high-nickel ternary cathode materials. The main reasons are, firstly, to stockpile in advance for new car models that are about to be launched, and secondly, to send them to overseas battery cell manufacturers for product verification.

SMM Cobalt Morning Meeting Summary: This week, the spot price of refined cobalt maintained a fluctuating trend. On the supply side, due to the slightly lower economic efficiency of refined cobalt production, the operating rate of smelters remained low, resulting in a slight decline in the supply of refined cobalt. On the demand side, influenced by the policy-related news from the DRC, some smelters and traders reported an increased willingness of downstream producers to inquire about prices. However, currently, most buyers and sellers are still in the negotiation stage, and overall market transactions remain weak. It is expected that before the official implementation of the policy, the spot price of refined cobalt will likely continue to fluctuate.

The EU has recently selected 13 overseas strategic raw material projects as a key initiative under its plan to secure the supply chain of critical minerals. For these 13 newly added overseas projects, the EU is expected to require a total capital investment of 5.5 billion euros (approximately 45.05 billion yuan). Specifically, the new projects cover 13 countries: Canada, Greenland, Kazakhstan, Norway, Serbia, Ukraine, Zambia, New Caledonia, Brazil, Madagascar, Malawi, South Africa, and the UK.

On June 10, the Ministry of Ecology and Environment of the People's Republic of China publicly issued the "Public Notice on Regulating Matters Related to Imported Recycled Black Mass Raw Materials from Lithium-ion Batteries and Recycled Steel Cases," with the document index number 000014672/2025-00219. The notice disclosed the HS code for recycled black mass raw materials from lithium-ion batteries as 3824999996, and the announcement will be implemented from August 1, 2025.