The Zhitong Finance App learned that China Merchants Securities released a research report saying that the average price of domestic VC has risen sharply recently and has returned above 200,000 per ton after a phased correction in the first half of the year. On the demand side, the expansion of lithium battery shipments is compounded by the increase in VC unit consumption under the new national standard for power battery safety, and global demand is expected to continue to rise; on the supply side, VC nominal production capacity is rapidly expanding, but the second-generation process is difficult, and effective supply release is expected to be limited. The bank expects the VC shortage pattern to continue, and subsequent prices will be significantly flexible, so it is recommended to continue to pay attention.
The main views of China Merchants Securities are as follows:
VC prices have returned to the upward channel, and industry sentiment has clearly recovered
As of August 14, 2026, the average domestic VC price had reached 225,000 yuan/ton, an increase of more than 70% since June. Affected by factors such as the suspension of production capacity of 10,000 tons in Suzhou Huayi and Dalian, the price increase has accelerated markedly. In the long run, VC prices experienced a complete cycle of rising in 2021, continuing to decline from 2022 to 2025, and bottoming out at the end of 2025. From July to August 2025, the average price dropped to about 46,000 yuan/ton. Then, demand for energy storage exploded and the faucet stopped production and maintenance, and prices rebounded rapidly. After experiencing a phased correction in the first half of 2026, it has risen again since June. The current price has risen about 4 times from the 2025 low, and the price is still in the upward channel.
With the expansion of lithium battery shipments compounded by an increase in VC unit consumption, global demand is expected to continue to rise
Global lithium battery shipments are expected to be about 3,600 GWh in 2027, and the CAGR is about 26% in 2025-2027, with the share of energy storage batteries increasing from 27% to 31%. In addition to the increase in total demand, the new national standard for power battery safety is driving an increase in VC addition ratio. It is expected that the VC addition ratio for subsequent power LFP/ternary systems will increase by about 33%/67%; energy storage battery cycle life and long-term stability requirements are higher, and the VC addition ratio for LFP systems is expected to increase by about 10%. Combined with the increase in LFP penetration rate and the increase in the share of high-VC single-consumption energy storage batteries, it is estimated that the average VC consumption in the industry will increase from 30 tons/GWh to 38 tons/GWh, and the global VC demand CAGR will be about 42% in 2025-2027, far exceeding the industry's growth rate.
New technology is difficult to expand production, and effective supply release is expected to be limited
Over the past period, leading companies have rapidly expanded production capacity in the name of major customers. Genyuan, Huasheng, and Yongtai all have plans to expand production by 2-100,000 tons; in addition, second-tier manufacturers have mostly adopted technical reforms to reduce costs and increase efficiency, and production capacity has increased by 20-30%. This round of production expansion mostly shifts from a generation long process to a second generation of short process technology, reducing costs by about 15,000 to 20,000 yuan/ton compared to the first generation, but industry feedback is that the second-generation process is more difficult, and production capacity release is slow. The bank expects VC's global nominal production capacity to reach 400,000 tons in '27, but it actually released about 110,000 tons, and the overall supply release is limited.
The VC shortage pattern is expected to continue, with significant price and profit elasticity
According to industry feedback, downstream demand is strong. Currently, VCs have a supply and demand gap, and may continue to be tight in the future. The bank expects that if the release of supply falls short of expectations, supply and demand will shift from a tight balance to an increase in shortages starting in the second half of 2026. VC accounts for a relatively low share of cell value. Even when estimated at current prices, it still accounts for only about 1.9%, and downstream can withstand price increases; against the backdrop of high demand and slow release of effective supply, VC prices are expected to still have strong support, and price and profit flexibility is expected to further strengthen, so it is recommended to continue to pay attention.
Recommended attention: Huasheng Lithium, Haike Xinyuan, Nikke Chemical, Tianci Materials, Yongtai Technology, Vosi Co., Ltd., Fuxiang Co., Ltd.
Risk warning: Risks such as downstream demand falling short of expectations, putting in new production capacity, or climbing too fast.