1、 Price trend

According to the analysis system of the commodity market of Shengyishe, as of March 19th, the price of high-quality power grade lithium iron phosphate is 43500 yuan/ton. Today, the price of lithium iron phosphate is still stable, with a strong trend. The price has increased by 0.05% compared to the previous day, with an increase of about 20 yuan/ton. Currently, the price has increased by 0.28% compared to the same period last week, and the price has increased by 1.16% compared to the same period last month. Currently, there is still support for the upstream cost side of lithium iron phosphate, with a strong trend in raw material prices, mainly digesting the previous increase. Currently, downstream demand is good, the procurement atmosphere is positive, and the energy storage market is still hot. According to reports, the leading enterprise of lithium iron phosphate, Ningde Times, has made new progress in lithium iron phosphate batteries. In recent days, At the China Electric Vehicle Hundred People Conference Forum, the company’s directors stated that CATL’s first skateboard chassis product based on lithium iron phosphate batteries will be officially put into mass production in the second half of this year, and there is still room for improvement in demand for lithium iron phosphate.

2、 Market analysis

Today, the price of lithium iron phosphate has maintained a stable, medium to strong trend, with a price increase of 0.05% compared to the previous day, around 20 yuan/ton. As of March, the lithium iron phosphate market has been showing a continuous growth trend. As of March 19th, the overall price of lithium iron phosphate in March has increased by 1.16%, with an increase of about 500 yuan/ton. Currently, the upstream cost side has strong support, and downstream demand has increased. Lithium iron phosphate has been improving in the short term. Currently, mica prices remain stable, and enterprises have a strong willingness to support prices. The raw material lithium carbonate quotation has mainly increased, and downstream procurement willingness is relatively strong. Currently, the demand for energy storage type lithium iron phosphate batteries is not decreasing, and with the promotion of policies, the overall market transaction focus has shifted upwards.

In terms of iron phosphate: Currently, iron phosphate enterprises are affected by the downstream lithium iron phosphate market, stimulating their production enthusiasm and strong willingness to raise prices. In March, downstream demand has recovered well, and the operating rate of iron phosphate enterprises has increased. In March 2024, China’s iron phosphate production reached 110000 tons, an increase of 85% month on month and 59% year-on-year, respectively. The increase in downstream demand has driven the expansion of iron phosphate production capacity. Currently, the mainstream price of iron phosphate is between 10000 and 10500 yuan/ton, and it is expected to maintain a stable, medium to strong trend in the short term.

In terms of cost: Currently, the prices of spodumene and lithium carbonate are still showing an upward trend. Upstream raw materials continue to rise, and the trend is strong. Upstream inventory is currently operating tightly, with a decrease in spot supply. The overall negotiation focus is on the upward trend. Lithium iron phosphate has certain support on the cost side, and the pressure on cost manufacturing is increasing. Lithium iron phosphate passively follows the upward trend. Downstream lithium iron phosphate has a strong willingness to purchase, and demand is still good. The replenishment atmosphere has significantly increased, and downstream demand has significantly improved. Currently, the operating rate of lithium iron phosphate is high, and the market supply has increased. Inventory is consumed normally, and there is sufficient spot. The overall market negotiation focus is on a high level.

In terms of demand: Currently, both the power market and energy storage market are in a rapid development stage, with a strong willingness to replenish downstream products and a rapid recovery in terminal demand. Battery companies have limited consumption of finished product inventory, and the procurement of lithium iron phosphate is mainly based on rigid demand. Currently, the potential for new energy power vehicles is enormous, and under the dual effects of policies and markets, China’s new energy vehicle industry is gradually expanding, In 2023, the production and sales of new energy vehicles reached 9.587 million and 9.495 million, respectively, with a year-on-year increase of 35.8% and 37.9%, and a market share of 31.6%. For 9 consecutive years, it has ranked first in the world. Currently, the demand for energy storage batteries is not comparable to that of power batteries. According to data statistics, in 2023, the growth rate of energy storage batteries has surpassed that of power batteries. It is expected that by 2025, in the field of power batteries, with the release of mainstream global automotive companies, lithium iron phosphate batteries will account for 43% of the market share. In the field of energy storage, lithium iron phosphate batteries are expected to occupy 85% of the market share in the future.

In terms of new energy storage, it can be divided into traditional energy storage and new energy storage. New energy storage includes lithium-ion batteries, flow batteries, compressed air energy storage, and flywheel energy storage. Compared with traditional energy storage, new energy storage has the characteristics of short construction period, flexible site selection, strong regulation ability, and fast response. In 2024, the application field of new energy storage batteries will continue to expand, According to statistics, more than 30 enterprises have carried out intensive construction or signing ceremonies related to energy storage, with a planned production capacity of over 150GW. Among them, half of the new energy storage has been opened, and the investment amount is about 60 billion yuan. China’s new energy storage industry is in a rapid and large-scale development stage. In the industry’s view, the energy storage industry, especially new energy storage, is facing greater opportunities and challenges. In 2024, the energy storage industry, Ushering in new development characteristics, new energy storage has been included in the government work report for the first time, and industrial development has entered a fast lane. Many battery companies have begun to compete in new quality productivity characterized by innovation and high-quality development. Recently, many energy storage battery companies such as Yiwei Energy Storage, Desai Battery, and BYD Energy Storage have launched new products to seize the next competitive point. In order to break through the current situation of severe homogenization competition in energy storage cell products, multiple battery companies have been persistently breaking through technological innovation, exploring safer, longer lifespan, and more cost-effective differentiated products, opening up the internal competition of “new quality productivity”, continuously driving enterprise development through technological innovation, and promoting the transformation and upgrading of traditional energy through new quality productivity.

3、 Future Market Forecast

In summary, as of March 19th, the average price of power type lithium iron phosphate trading company is 43500 yuan/ton, and the market price of energy storage type lithium iron phosphate is around 42000-43000 yuan/ton. In the short term, there is still support on the demand and cost sides, and the price still maintains a strong trend in the short term. In 2023, the two major application fields of power and energy storage have grown rapidly, and the proportion of lithium iron phosphate in power and energy storage has greatly increased. Under the promotion of policies, the production of lithium iron phosphate continues to grow. Currently, from the number of energy storage projects, the demand for lithium batteries will further increase. The lithium battery industry is currently showing a good development trend in the new energy vehicle and storage industries. Energy batteries, power batteries, etc., have relatively optimistic future demand, and lithium iron phosphate has sufficient power to rise.