The Battery ETF China Merchants (561910) ended an 8-day losing streak with a significant rebound in the afternoon, rising over 3% at one point. Component stocks such as Hangke Technology and Defu Technology rose over 10%, while Tianhua New Energy and Xingyuan Materials increased by over 9%.

On the news front, the previously soaring lithium carbonate prices have begun to decline, opening up space for profit recovery in the midstream manufacturing sector. As of June 5, 2026, the market price for battery-grade lithium carbonate was reported at 163,000 yuan/ton, with a weekly decline of over 8%. Lithium hydroxide and industrial-grade lithium carbonate also fell simultaneously. The stabilization and decline in raw material prices help alleviate cost pressures for battery companies, improve the smoothness of price transmission, and subsequently enhance gross margin levels. Historical experience shows that a moderate decline in lithium carbonate prices often corresponds to a release window for profit elasticity in the midstream battery sector, and the current timing is in the verification period of this logic.

Positive signals on the demand side are also reflected in the energy storage sector. On June 3, the Shanghai SNEC International Photovoltaic Energy Storage Exhibition showcased signed agreements, with five battery companies, including Ganfeng Lithium, Yiwei Power, and Hive Energy, collectively securing orders for 70GWh of energy storage battery systems, indicating a significant increase in investment willingness from downstream owners. The concentration of energy storage orders not only verifies the accelerated advancement of domestic large-scale storage and commercial energy storage projects but also reflects the continuous optimization of project economic models after the stabilization of industry chain prices. Coupled with the fact that domestic energy storage installations doubled year-on-year in the first quarter and that energy storage battery sales surged by 115.9% in March, energy storage is becoming the most certain growth pole in the battery industry chain.

In terms of power batteries, the latest data from the Passenger Car Association shows that in May, domestic retail sales of new energy vehicles reached 950,000 units, a month-on-month increase of 12%, with a penetration rate of 62.5%, further deepening the electrification trend.

From a configuration perspective, the current battery industry chain presents three favorable factors: supported demand, improved costs, and verified orders. The continuous increase in the penetration rate of new energy vehicles solidifies the fundamentals, the decline in lithium carbonate prices releases midstream profit elasticity, and the concentration of energy storage orders verifies the continuation of prosperity. For investors looking to efficiently position themselves, attention can be paid to the Battery ETF (561910), which closely tracks the China Securities Battery Theme Index and covers core industry leaders such as CATL, Sungrow Power, and DeYuan Co., with energy storage business accounting for over 60%