3Q26 Outlook: Equity Implications: New Materials

Research evidence excerpt

3Q26 Outlook: Equity Implications: New Materials

Idea

July 9, 2026 08:00 AM GMT

Morgan Stanley Asia Limited+MChina Materials | Asia Pacific Rachel L Zhang

Equity Analyst

3Q26 Outlook: Equity Rachel.Zhang@morganstanley.comHannah Yang, CFA +852 2239-1520

Hannah.Yang1@morganstanley.com +852 2239-7079

Implications: New Materials Chris Jiang

Chris.Jiang@morganstanley.com +852 3963-1593

We prefer glass fiber due to AI spillover effects. We see Cynthia Tang

potential supply disruption risks for nickel and uranium. ResearchCynthia.Tang@morganstanley.comAssociate +852 3963-4360

Glass fiber - AI‑driven demand supports pricing: AI-related demand is driving high-

end glass fiber and fabric demand and prices, leading to incremental glass fiber

capacity shifts toward high-end products. As a result, supply of standard products

such as 7628 has tightened, contributing to price hikes of 95% YTD, from Rmb4.4/

meter to Rmb8.6/meter. As high-end glass fiber demand continues to outpace Greater China Materials

supply, we expect pricing for these products to remain supported over the next one Asia Pacific

Industry View Attractive

to two years. Industry supply expansion may remain constrained, partly due to long

Related Researchlead times for weaving machines.

China Materials: 3Q26 Outlook: Time To Bottom

Lithium – price seen bottoming in the near term: Lithium demand has been better Fish?

than expected YTD, driven by robust growth in Energy Storage Systems (ESS) and China Materials: 3Q26 Outlook: Equity

higher battery intensity in EVs. Lithium prices have pulled back sharply from the Implications: Building Materials

May 2026 peak of CNY 200,500/t, falling to CNY 157,000/t as of the end of June on China Materials: 3Q26 Outlook: Equity

supply increase concerns.