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This report (chinatimes.net.cn) reporter Hu Yawen reported from Beijing
On March 20, over 4,700 stocks in the A-share market fell, and the SSE Index fell below 4,000 points, reaching a new low for the year. However, the lithium battery sector, which had recently undergone a deep adjustment, showed strong performance against the trend, ranking among the top in market gains. According to Wind data, on that day, the indices for lithium battery electrolyte, sodium-ion batteries, energy storage, and power batteries all rose over 2%, with the upstream lithium battery materials and lithium mining sectors also rising in tandem. Stocks such as Shida Shenghua (603026.SH) and Shangneng Electric (300827.SZ) hit the daily limit.
However, the new energy sector has experienced significant volatility recently and remains in an overall downward trend. On March 17, the Wind Energy Storage Index fell by 3.43%, marking the largest single-day decline for the week (from March 16 to March 20). Yang Delong, chief economist and fund manager at Qianhai Kaiyuan Fund, told reporters from the China Times, &#34;Recently, the A-share market has been affected by the escalation of conflicts in the Middle East, leading to a significant adjustment in the market. However, this is only a short-term situation, and the overall trend of a slow bull market has not changed. During the economic transformation process, there is indeed significant industry differentiation, and emerging industries are attracting a large influx of capital every day. In terms of technological innovation, attention can be focused on fields such as robotics, chips, and energy storage, as well as heavy asset industries like power equipment and non-ferrous metals that will not be eliminated by AI.&#34;
Rebound After Decline
This week, the SSE Index continued to decline, falling below 4,000 points and returning to the position at the beginning of 2026. Unlike indices for cloud computing, data security, and financial technology, which all fell sharply, the new energy sector showed strong performance against the trend. On March 20, several lithium battery-related sectors briefly rose over 3% during the midday session, but then significantly adjusted in the closing phase, with gains reduced to around 2%.
From the performance of lithium battery-related sectors throughout the day, individual stocks in the energy storage sector showed a notably strong upward trend, while structural differentiation occurred within the sector, rather than a broad-based rally. Among the 57 constituent stocks, 36 rose, 21 fell, and 11 rose more than 8%. As of the close on March 20, Shangneng Electric in the energy storage sector hit the daily limit with a 20% increase, while Yongzhen Co., Ltd. (603381.SH), Haopeng Technology (001283.SZ), and Zhengtai Power (002150.SZ) achieved a 10% increase, and Jinlang Technology (300763.SZ), YN Technology (688348.SH), and Penghui Energy (300438.SZ) all rose over 10%. Additionally, Shida Shenghua in the lithium battery electrolyte sector also hit the daily limit with a 10% increase.
This week, the energy storage sector exhibited high volatility, characterized by a rebound after a deep decline followed by another adjustment. On March 17, the Wind Energy Storage Index fell by 3.43%, marking the largest single-day decline. On March 18, the index's trading volume briefly dropped to a low of 70.353 billion yuan. However, on March 20, funds clearly flowed back, with the energy storage sector rising by 2.47%, trading volume reaching 134.066 billion yuan, and transaction volume at 2.271 billion shares
Both reached the highest levels of the week, but the late-session pullback still reflects significant market divergence.
Similar to the sector performance, the constituent stocks also experienced considerable volatility. Shangneng Electric fell to 37.2 yuan/share on March 18, then rose back to 44.93 yuan/share on March 20. Jinlang Technology dropped to 97.3 yuan/share on March 17, closing at 119.5 yuan/share on March 20. YN Energy fell to 56.26 yuan/share on March 17, then rose to 65.55 yuan/share on March 20.
Regarding the recent decline in the non-ferrous metal sector, including copper, aluminum, and lithium, Yang Delong stated, &#34;Non-ferrous metals are typical high-elasticity varieties, experiencing significant gains during the uptrend and are also prone to concentrated selling during the downtrend. Due to the previous significant price increases and the escalation of conflicts in the Middle East heightening market risk aversion, investor risk appetite has decreased. In the short term, the non-ferrous metal sector is generally in an adjustment period, with funds shifting towards heavy asset and low elimination rate sectors, such as electricity, power grid equipment, and railways. These traditional blue-chip stocks have relatively low valuations and high dividend rates.&#34;
Short-term speculation has not ceased
Multiple brokerages pointed out in their March research reports that the escalation of conflicts in the Middle East is the core reason for recent market volatility and capital rotation. CITIC Securities analyzed that &#34;the U.S. and Israel's military strikes against Iran have caused global stock market fluctuations, and investors currently have significant disagreements regarding the subsequent impacts of the war. The escalation of conflicts has increased uncertainty in global energy supply, rapidly raising risk aversion, with funds migrating from stocks and other risk assets to safe-haven assets like gold and the U.S. dollar. However, in the past 20 years, during seven major conflicts in the Middle East, the sentiment-driven sell-off cycle in A-shares has generally been short, and the current market adjustment is sufficient, with the medium to long-term trend not disturbed by short-term geopolitical conflicts.&#34;
After experiencing a deep adjustment at the beginning of the week, why did funds flow back on March 20? From the perspective of some enterprises, there was no new information in the industry. On March 20, a representative from Jinlang Technology told the &#34;Hua Xia Times,&#34; &#34;Since the beginning of the year, the company's demand and production scheduling have been relatively normal. It is inconvenient to draw direct conclusions about the demand situation in the European and American markets, and we need to continue monitoring.&#34;
From the industry perspective, some positive signals have been released from the industrial end, with news of production recovery in March serving as a confidence catalyst. Several brokerages indicated that the pre-production situation in the lithium battery supply chain improved significantly in March. The Dazhong Times Research Institute conducted a survey of the top 20 battery manufacturers in the industry, showing that the total pre-production volume of China's lithium battery market in March 2026 is expected to be approximately 219 gigawatt-hours, a month-on-month increase of 16.5%, with the proportion of energy storage cell pre-production rising to 40.6%. Meanwhile, global lithium battery production is around 232 gigawatt-hours, a month-on-month increase of 19%.
WanLian Securities' research report pointed out that energy storage has become one of the important driving forces for the growth of lithium battery shipments. &#34;In 2026, the energy storage market is expected to show stable growth domestically and multi-point concurrent growth overseas. Currently, domestic energy storage project returns are improving, and the scale of bidding remains high, with installation demand expected to maintain stable growth. Overseas, the acceleration of data center construction in the U.S. is driving energy storage demand; Europe has strong demand for large-scale energy storage, with high long-term growth certainty; emerging markets such as the Middle East and Australia have policy support, enhancing demand for large-scale and household energy storage
Jinlang Technology is the world's third-largest inverter manufacturer, previously less involved in the energy storage system field. Starting from the fourth quarter of 2025, the company will not only sell high-power inverters for industrial and commercial storage but also launch industrial and commercial storage systems, with mass shipments expected to begin in January 2026. The company is currently in the production ramp-up phase. In March of this year, Jinlang Technology stated during an investor survey that &#34;energy storage systems are a core strategic increment this year, and the products are primarily for export. For the company, Europe remains the largest overseas market, while emerging markets are mainly in Southeast Asia and Africa. The industrial and commercial storage market has huge potential, but the current base is relatively small, and rapid growth is expected in the next three years.&#34;
It is noteworthy that the trend of strong players becoming stronger in the energy storage market is evident. The Dazhong Era Think Tank pointed out that the supply pattern shows a state of &#34;core production lines running at full capacity, while marginal production lines remain dormant.&#34; The order increment for energy storage cells from leading enterprises accounts for over 70% of the industry's total increment, with &#34;incremental demand highly concentrated on large-size products of 314Ah and above, while the market space for medium and small-sized energy storage cells continues to be squeezed. The energy storage production lines of leading enterprises have not stopped since the beginning of the year, with some factories maintaining a three-shift production schedule even during the Spring Festival holiday, while the resumption rate of small-capacity consumer cells and low-demand niche power cell production lines has only recovered to 50%-60%. Many second and third-tier manufacturers' outdated capacities have been directly shut down, completely exiting the market.&#34;

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On March 20, over 4,700 stocks in the A-share market fell, and the SSE Index dropped below 4,000 points, hitting a new low for the year. The lithium battery sector performed strongly against the trend, with an increase of over 2%. Despite the volatility in the new energy sector, it remains in an overall downward state. Yang Delong, chief economist of Qianhai Kaiyuan Fund, stated that the short-term market adjustment will not affect the long-term trend and suggested focusing on emerging industries such as robotics, chips, and energy storage. Individual stocks in the energy storage sector performed strongly, with some stocks hitting the daily limit

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Big ups and downs! The lithium battery sector is experiencing severe fluctuations, and short sellers still have a short-term advantage