Under high oil prices, energy storage demand grows non-linearly, and valuation still has upward potential! Battery ETF (561910) surged over 4% with increased trading volume.

On March 20, the new energy battery sector experienced a strong rebound, with trading activity significantly increasing. This reversed the weak consolidation pattern from the previous trading day and became one of the core targets for sector capital deployment in the new energy track. As of the time of this report, the Battery ETF (561910) rose by 4.46%. Judging by the performance of constituent stocks, all sector stocks turned green, with leading companies leading the gains. The sector’s purity and linkage became more prominent, and energy storage-related constituents performed especially well. Shangneng Electric and First Sail New Energy hit the 20CM daily limit; Jinneng Technology, Penghui Energy, Hemei Co., Ltd., and Putailai all saw gains exceeding 10%.

Recently, positive developments from both the industrial and demand sides have been densely released, providing strong support for the battery industry chain. Demand-side data has been particularly impressive. According to CESA statistics, from January to February, domestic new installations of advanced energy storage reached 9.51GW/24.18GWh, with capacity surging 472% year-over-year, establishing the peak season for energy storage. Meanwhile, lithium battery industry production scheduling in March reached 219GWh, up 16.5% month-over-month and 37%-56% year-over-year, with leading companies operating at full capacity and full sales, while downstream replenishment demand continues to be released.

Combined with AI computing power driving a surge in electricity demand, energy storage—serving as a core link for power supply security—experiences nonlinear growth in demand. Additionally, the stabilization and rebound of lithium carbonate prices are expected to further improve industry chain profitability expectations, creating a resonance of multiple positive factors.

CITIC Construction Investment pointed out that, driven by nonlinear growth in energy storage demand, the new cycle for lithium batteries is becoming increasingly clear. It is expected that by 2026, global lithium battery demand will reach 3,065GWh, a 33.7% increase year-over-year. Currently, lithium battery manufacturers are steadily raising their production plans, and the leading position of battery companies remains solid. Dongwu Securities also stated that the core of this round of the battery sector’s rally lies in demand exceeding expectations, with both EV and energy storage demands being revised upward. AI data centers are strongly boosting the sector. Over a one-year horizon, the current valuation of the lithium battery sector is not overstated, and there remains room for further growth.

Data shows that the energy storage component in the CSI Battery Theme Index tracked by the Battery ETF (561910) accounts for nearly 60%, with solid-state batteries making up nearly 40%. The index includes industry leaders such as Sunshine Energy, CATL (Contemporary Amperex Technology Co. Limited), Gotion High-Tech, Lead Intelligent Equipment, Tianqi Materials, among others. It covers the upstream and downstream of the battery industry chain, including power batteries, energy storage, and consumer electronics. The Battery ETF (561910) is linked to A-shares: 016019; and C-shares: 016020.

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