[SMM Analysis] Strong demand as peak season approaches, electrolyte supply-demand pattern improves

In August 2026, China's electrolyte industry saw simultaneous expansion on both the supply and demand sides, with market sentiment steadily improving. According to available information, China's total electrolyte production in August rose about 8.6% MoM from July and increased about 79% YoY.

In August, downstream demand for electrolyte entered a positive phase driven by the dual momentum of the EV and ESS sectors. The EV sector saw a concentrated release of multiple favorable factors: technological transformation capacity at leading battery cell manufacturers ramped up intensively, the consumption tax implementation drove some September–October orders to be front-loaded into August production, and stocking demand for the traditional September–October peak season gradually kicked in. These three factors combined to push battery cell production schedules steadily upward. The ESS sector maintained its high-growth performance: downstream demand remained robust, and as battery cell capacity gradually ramped up, industry production climbed steadily. The coordinated efforts of both the EV and ESS sectors jointly lifted the industry's overall operating rate, injecting strong momentum into the continued expansion of electrolyte demand and production.

Looking ahead to September, downstream battery demand is expected to increase steadily, and electrolyte production is expected to maintain a favorable growth trajectory. As the September–October auto sales peak season officially begins, demand is expected to see a concentrated release, driving further growth in power battery cell production schedules. Meanwhile, the ESS sector's shipment peak and continued production line ramp-up will work in tandem, with both the EV and ESS sectors continuing to push in the same direction, further elevating electrolyte demand. In addition, due to logistics restrictions during the National Day holiday, some orders originally scheduled for the holiday period will need to be produced and shipped to downstream client factories in advance in September. This front-loading effect will also contribute growth to September electrolyte production, jointly driving industry production to continue climbing.

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SMM New Energy Research Team

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Ma Rui 021-51595780

Feng Disheng 021-51666714

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Zhang Haohan 021-51666752

Wang Zihan 021-51666914

Wang Jie 021-51595902

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