CATL(SZ:300750) Zheng Quan Shi Bao·2025-10-29 18:36Core Viewpoint - The lithium iron phosphate (LFP) industry is experiencing a new round of capacity expansion driven by strong downstream demand, with a focus on high-end products and overseas markets, transitioning from price and scale competition to value and technology competition [1][9]. Industry Dynamics - Leading battery manufacturers are fully utilizing their LFP production capacity, with second and third-tier manufacturers also increasing their operating rates [2][11]. - The market demand for LFP is robust, leading to strategic partnerships and prepayment agreements, such as CATL's 1.5 billion yuan prepayment to Jiangxi Shenghua to secure LFP supply [2][3]. - The LFP industry is witnessing a dual trend of expansion and contraction, with leading companies experiencing full orders while smaller firms face potential exit or upgrade challenges [11]. Capacity Expansion - Companies like Fujian Precision and Longpan Technology are investing significantly in new LFP projects, with Jiangxi Shenghua planning a 350,000-ton capacity project and Longpan Technology raising funds for multiple projects [8][10]. - The overall operating rate in the LFP industry has exceeded 60% this year, with expectations of surpassing 70% next year, indicating a balanced capacity outlook [7][11]. Market Trends - The demand for LFP batteries is driven by the growth in both electric vehicle (EV) and energy storage sectors, with LFP battery installation in China reaching 402.6 GWh in the first three quarters of 2023, a 62.7% year-on-year increase [4][5]. - The global energy storage market is also expanding, with a projected 106.1% year-on-year growth in battery cell shipments in the first half of 2025 [4]. Technological Advancements - The industry is focusing on high-pressure, fast-charging, and long-cycle LFP products, with companies like Fujian Precision and Longpan Technology leading in high-performance product sales [12][13]. - The ability to quickly release effective capacity overseas is becoming a competitive advantage, as companies adapt to local supply chain needs and trade friction [13]. Investment Strategies - The capital expenditure plans of LFP manufacturers are primarily directed towards high-end products and overseas capacity expansion, with a trend towards integrated supply chains to enhance cost efficiency [10][13].