【SMM analysis】Market Dynamics of Power Battery Supply and Tiered Cells（9.1-9.5）

From an overall data perspective, the supply side shows that both the power and energy storage markets have entered a phase of demand growth by the end of August. In the power sector, upstream power cell production has already increased to proactively address the upcoming "Golden September and Silver October" automobile sales peak and meet the stocking needs of car manufacturers for their year-end sales push.

However, the total volume of retired batteries on the demand side remains stable and has not changed in sync with the increase in power cell production. This is mainly because power batteries installed earlier are still in their normal service cycle and have not yet entered the large-scale retirement phase.

The recent decline in lithium carbonate prices should, in theory, alleviate cost pressures on tiered cells. However, due to the time lag in the transmission of terminal prices to the downstream industry chain and the relatively stable supply-demand relationship in the tiered utilization market, upstream cell manufacturers still have a strong willingness to maintain high prices for tiered cells. These two factors offset each other, and it is expected that tiered cell prices will remain relatively stable in the short term.

Overall, the upward potential for tiered cell prices is expected to be limited in the future. Most companies continue to operate with low inventory levels, and to avoid price fluctuation risks, procurement activities are primarily focused on meeting immediate production needs.