Ganfeng Lithium sees surge in battery demand amid China-US energy rivalry

China’s Ganfeng Lithium, the world’s largest producer of lithium metal, is envisioning an “explosive growth” in the global energy storage system (ESS) market in 2026, spurred by higher prices of the key battery material and buoyant demand for renewable energy infrastructure. Executives including president Wang Xiaoshen told an investors’ conference on Tuesday that the global decarbonisation drive had created a strong and sustainable trajectory for Ganfeng, which swung from loss to profit last year as lithium prices climbed. “The ESS sector has entered a period of explosive growth, and this trend is expected to continue into 2026,” executives said in a filing to the Shenzhen Stock Exchange. “At the same time, AI [artificial intelligence] computing and data centres, the new power consumption scenarios, are driving a constant increase in demand for ESS.” The upbeat forecast by Ganfeng, which supplies lithium to the world’s major carmakers from Tesla to BMW, came after analysts predicted that mainland China would maintain its dominance in the global ESS battery market. Ganfeng’s Hong Kong-listed shares slumped 4.7 per cent to HK$69.30 on Wednesday morning while its Shenzhen-listed shares dropped 1.4 per cent to 77.28 yuan. In 2025, Ganfeng posted net profits of 1.61 billion yuan (US$233.8 million), compared with net losses of 2.1 billion yuan a year earlier. ESS consists of batteries as well as systems for battery management, power conversion and control to help store excess energy generated from renewable sources while providing backup power during outages, ensuring grid stability. China is now a dominant player in the global ESS industry, with mainland companies holding more than 80 per cent of the market. According to Seoul-based SNE Research, the global ESS battery market jumped 79 per cent year on year to 550 gigawatt-hours (GWh) in 2025. One GW can supply about 750,000 households for a year. As China’s ESS sector rapidly expands nationwide with government support, the US as a latecomer is playing catch-up as Washington seeks to restructure supply chains to exclude Chinese-made batteries and components. In 2025, the mainland’s newly added battery storage capacity increased 40 per cent year on year to 174.2GWh, an all-time high, according to Benchmark Mineral Intelligence. In December alone, China completed 65GWh of grid-connected battery capacity, 12 per cent more than the roughly 58GWh installed across the US during the full 2025. SNE data showed that Contemporary Amperex Technology Ltd, the country’s electric vehicle (EV) battery leader, controlled 30 per cent of the global ESS battery market in 2025, while Shenzhen-based Eve Energy held 12 per cent. “Stronger ESS demand and leading battery companies’ capacity conversion from EV to ESS batteries are improving supply-demand dynamics,” said Will Cho, an analyst for Korea EV battery, autos and technology at HSBC, in a research note on Monday. “Recent rebounds in lithium and battery prices suggest supply-led recovery, with pricing sentiment improving across the value chain.” Prices of lithium bounced more than 100 per cent from last year’s trough of about 70,000 yuan per tonne recorded in June, bolstered by a global investment boom in AI and a rush of EV purchases. For the first 11 months of 2025, China exported 4.25 billion units of lithium batteries worth more than US$69 billion, up 19.3 per cent and 25.6 per cent, respectively, from a year earlier, according to customs data.