A-shares suddenly drop! Two major giants both plunge! Two major negative news hits

Major New Energy Giants Suddenly Plunge!

Today (February 26), the market experienced a sudden shift. The leading stock on the ChiNext Board, CATL, opened lower and continued to decline, dropping over 5%. Within half an hour of trading, the turnover exceeded 7 billion yuan, surpassing the total for yesterday’s entire day; Sunlight Power also fell more than 5%. These two stocks once contributed 35 points to the decline of the ChiNext Index. As a result, the ChiNext Index once fell more than 1%.

So, what exactly happened? Industry analysts suggest there are mainly two reasons: first, the rise in lithium prices; second, the emergence of iron-air batteries. Google announced that it will adopt innovative “iron-air battery” energy storage technology at its large data center campus in Minnesota.

Both Plunge

In the early trading today, the ChiNext Board suddenly tumbled, with CATL and Sunlight Power both falling over 5%, dragging down stocks like EVE Energy. Battery ETFs also dropped more than 2% at one point.

What caused this? According to information from industry insiders obtained by Securities Times, two main factors changed the logic of these giants.

First, Reuters reported that the Zimbabwe government announced an immediate suspension of all exports of raw materials and lithium concentrates, including goods in transit. Only companies with valid mining rights and approved ore processing plants will be eligible to export in the future, while agents and third-party traders are prohibited from exporting. This will undoubtedly push up lithium prices, so stocks like Salt Lake Lithium and other lithium-related stocks performed strongly today. However, against the backdrop of declining new energy vehicle sales, this is undoubtedly bad news for battery manufacturers.

Second, Google is heavily investing in “iron-air batteries.” This new type of device, known as “iron-air batteries,” can provide stable power for up to 100 hours. Compared to the current mainstream lithium batteries, which last only 4 to 8 hours, this technology significantly extends the practical lifespan of green energy facilities. The emergence of this new technology is also affecting valuations. Therefore, today’s energy storage sector showed very obvious divergence. Keli Yuan, a stock related to the “iron-air battery” concept, opened with a limit-up. Meanwhile, traditional lithium battery producers like Penghui Energy and CATL saw sharp declines, with Penghui Energy falling nearly 10%.

How Big Is the Impact?

According to official data, Zimbabwe’s lithium reserves rank among the top in Africa and are one of the largest producers globally, with an estimated resource volume of 126 million tons. CITIC Securities states that by 2025, 19% of China’s imported lithium concentrates will come from Zimbabwe. It is expected that by 2026, Zimbabwe’s lithium resource output will account for 12% of the global total. The country’s export ban on lithium minerals will lead to a tightening of lithium carbonate supply in China in the short term, likely driving lithium prices sharply higher. Lithium carbonate futures surged significantly this morning, and although they retreated later, they still led the gains among commodity futures.

Galaxy Futures believes that Zimbabwe’s exports are expected to decrease noticeably in the short term. On the demand side, energy storage is optimistic at the start of the year, with resilient momentum in power applications. Downstream replenishment after the holiday is strong, but upstream and traders’ inventories are tight. Market sentiment is optimistic in the short term, making lithium prices prone to rise easily and fall difficult. Today’s opening is likely to be significantly higher. Holding long positions at low levels with a target of at least new highs. However, under strict regulatory conditions, liquidity for lithium carbonate is insufficient, leading to high volatility. Caution is advised for light positions.

Guotai Haitong analyst Li Pengfei believes that by 2026, driven by demand for energy storage and power batteries, the demand for lithium carbonate will grow rapidly. On the supply side, disturbances at key mines in Jiangxi have not yet eased, and overseas supply changes are ongoing. It is expected that the supply and demand of lithium carbonate will remain tight in 2026.

From a technological breakthrough perspective, metal-air batteries are not a new concept. In 2015, China’s “Made in China 2025” policy mentioned promoting the construction of new power battery systems including metal-air batteries. In 2017, the “Action Plan for Promoting the Development of Automotive Power Batteries” explicitly supported the engineering development of metal-air batteries. In 2022, the “14th Five-Year Plan” for new energy storage development proposed research and development of high-energy-density storage technologies like metal-air batteries. Among these, zinc-air batteries are the most mature for commercialization, widely used in hearing aids, electronic watches, and other small devices; aluminum-air batteries follow.

Aijian Securities pointed out that “iron-air batteries” could become a potential long-term energy storage solution due to their extremely low unit capacity cost. QYResearch reports forecast that by 2031, the global market revenue for metal-air batteries will grow from $296 million in 2023 to $852 million, with a compound annual growth rate of over 14%.