Sou Hu Cai Jing·2025-12-17 14:37Core Viewpoint - The price of lithium iron phosphate (LFP), a key material in the new energy industry, has risen significantly, indicating a shift in the market dynamics and prompting widespread attention [2] Supply and Demand Dynamics - The LFP industry is currently experiencing tight supply and demand, with many companies operating at full capacity, which supports their pricing actions [3] - LFP materials account for nearly 74% of the cathode material shipments in lithium-ion batteries and 99.9% in energy storage batteries, making them crucial for the entire industry chain [3] - Despite a projected production capacity of nearly 4.7 million tons in 2024, the actual output is only around 2.3 million tons, resulting in a utilization rate of less than 50% [3] - From the end of 2022 to August 2025, LFP prices have fluctuated dramatically, dropping from 173,000 yuan/ton to 34,000 yuan/ton, a decline of 80%, leading to over 36 months of continuous losses for the industry [3] Recent Price Trends - As of December 16, the mainstream market price for power-type LFP has increased from 31,800 yuan/ton at the end of June to 41,200 yuan/ton, with a recent monthly increase of 2,600 yuan/ton [4] - Companies are actively communicating with downstream customers about price increases, with some reporting price hikes of 1,500 to 2,000 yuan per ton since early November [4] Cost Pressures - The primary driver of the recent price surge in the LFP industry is the rapid increase in raw material costs, with the average price of phosphoric acid rising by 0.9% in November compared to October [5] - The costs of key raw materials such as phosphoric acid, monoammonium phosphate, and ferrous sulfate have increased by 6.9%, 8.5%, and 3.1%, respectively, contributing to higher production costs for LFP [5][6] Market Outlook - LFP is becoming a mainstream technology in global power and energy storage batteries due to its safety, long cycle life, and cost advantages, indicating significant growth potential [7] - The demand for lithium-ion batteries is expected to push the industry value towards 3 trillion yuan this year, driven by a surge in the new energy vehicle market and a 60% year-on-year increase in energy storage installations [7] - The industry may face a temporary supply shortage if production expansion does not keep pace with demand growth, as external financing for expansion has largely dried up [7] Industry Challenges and Opportunities - Despite the price recovery, LFP remains below production costs, indicating ongoing financial difficulties for the industry [8] - Continuous research and development investments are necessary for technological upgrades, as the industry transitions from second and third-generation products to fourth-generation high-density products [8][9] - Positive signals include a potential narrowing of losses for companies and significant procurement agreements, such as a long-term supply contract between a subsidiary of Longpan Technology and Sunwoda [8][9]