Everbright Securities: Marginal improvement in supply and demand pattern, hexafluoride prices are expected to continue rising

According to the Zhitong Finance APP, Everbright Securities released a research report stating that the core driving force behind the recent price increase of lithium hexafluorophosphate is the strong recovery in demand and the tight supply situation. The demand from downstream electrolyte and battery manufacturers has significantly rebounded, while upstream lithium hexafluorophosphate producers generally adopted cautious production strategies during the industry's low period and did not significantly expand production capacity. Currently, most manufacturers in the market are operating at full capacity, with little increase in supply. Since mid-September, the price of lithium hexafluorophosphate has broken the long-term sideways trend and entered a rapid upward channel, with a leap in price observed after the National Day holiday.

The main viewpoints of Everbright Securities are as follows:

Marginal improvement in supply-demand pattern, lithium hexafluorophosphate prices are expected to continue rising

The core driving force behind the recent price increase of lithium hexafluorophosphate is the strong recovery in demand and the tight supply situation. The demand from downstream electrolyte and battery manufacturers has significantly rebounded, while upstream lithium hexafluorophosphate producers generally adopted cautious production strategies during the industry's low period and did not significantly expand production capacity. Currently, most manufacturers in the market are operating at full capacity, with little increase in supply.

According to Baichuan Yingfu data, as of October 17, 2025, the operating rate of the lithium hexafluorophosphate market was 75.43%. Even if producers start to initiate expansion plans now, the construction and ramp-up of new capacity will take at least a year, and there is still a lack of effective supply increase in the short term, leading to further shortages in the lithium hexafluorophosphate market. Current industry inventory has basically bottomed out, with Baichuan Yingfu data showing that as of October 17, 2025, the inventory of lithium hexafluorophosphate was only 1,340 tons.

Since mid-September, the price of lithium hexafluorophosphate has broken the long-term sideways trend and entered a rapid upward channel, with a leap in price observed after the National Day holiday. According to Baichuan Yingfu data, as of October 17, 2025, the average market price of lithium hexafluorophosphate rose to 75,000 yuan/ton, an increase of 16.3% compared to last week and a 20.0% increase compared to the beginning of the year. The tight balance between supply and demand for lithium hexafluorophosphate is expected to continue in the short term.

China's lithium hexafluorophosphate production capacity is concentrated in a few enterprises, and profitability is expected to recover due to price increases

According to Baichuan Yingfu data, as of October 17, 2025, China's lithium hexafluorophosphate industry has a total production capacity of 442,900 tons/year, with effective capacity of 389,400 tons/year, a year-on-year increase of 13.7%. The production capacity is mainly concentrated in major manufacturers such as TINCI, DFD, Tianji Co., Ltd., and Shida Shenghua. Among them, TINCI has a production capacity of approximately 110,000 tons/year, DFD has a production capacity of about 60,000 tons/year, Shida Shenghua has a production capacity of about 37,000 tons/year, and Tianji Co., Ltd. has a production capacity of about 37,000 tons/year. The existing lithium hexafluorophosphate production capacity of Shilei Fluorine Materials, invested by CAPCHEM, is 24,000 tons/year, and after the completion of technical transformation by the end of 2025, the planned production capacity for lithium hexafluorophosphate can reach 36,000 tons/year.

Baichuan Yingfu expects that from 2025 to 2027, the entire industry will successively put into production 304,000 tons, 518,300 tons, and 153,000 tons/year of lithium hexafluorophosphate capacity. Benefiting from the continuous rise in lithium hexafluorophosphate prices and the improvement in capacity utilization, it is expected that the unit profitability level of leading enterprises in the lithium hexafluorophosphate business will gradually recover The rapid development of new energy vehicles, energy storage, and other fields has led to a broad downstream demand for lithium-ion battery materials

The lithium-ion battery materials industry maintains stable growth in demand within the new energy vehicle and energy storage application fields. In terms of energy storage, from January to August, the cumulative bidding scale for domestic energy storage reached 211.11 GWh. The installed capacity of new energy storage continues to grow rapidly, with new installations in China reaching 21.9 GW/55.2 GWh in the first half of 2025, a year-on-year increase of 69.4%/76.6%. Leading energy storage companies have order schedules extending to 2026, with CATL having orders exceeding 48 GWh, and companies like Hicharge Energy and Eve Energy operating at full capacity, with some orders needing to be outsourced to mid-tier companies.

In terms of new energy vehicles, in the first half of 2025, China's production and sales of new energy vehicles were 6.968 million and 6.937 million units, respectively, representing year-on-year growth of 41.4% and 40.3%. The cumulative installed capacity of power batteries in China reached 302.2 GWh, a year-on-year increase of 48.8%. At the same time, lithium-ion battery technology is advancing towards higher safety, longer cycle life, lower costs, and higher energy density, expanding into more application fields such as eVTOL and robotics. The new demand volume for lithium battery materials will continue to grow, and the industry's development prospects remain broad.

Target Aspects

The supply-demand pattern is marginally improving, and the price of lithium hexafluorophosphate is expected to continue rising. It is recommended to pay attention to leading companies in lithium hexafluorophosphate: TINCI (002709.SZ), DFD (002407.SZ), Tianji (002759.SZ), Shida Shenghua (603026.SH), and CAPCHEM (300037.SZ).

Risk Analysis

The risks of rapid declines in raw material prices and maintaining high levels; the risk of downstream demand falling short of expectations