Core Insights - The extension of the exemption period for certain tariffs under the US Section 301 to November 29, 2025, is expected to boost the domestic energy storage industry in China, with lithium iron phosphate (LFP) battery shipments projected to exceed 1.3 TWh by the end of 2025, leading to a 45% year-on-year growth in the upstream phosphate cathode materials market, which is expected to exceed 3.5 million tons [1] Industry Overview - The phosphate cathode materials industry is anticipated to undergo a third round of capacity expansion due to the rapid growth in demand for lithium iron phosphate materials, with capacity utilization expected to reach 70% by the end of 2025 [2] - A new wave of capacity expansion is expected post-2026, driven by product upgrades, the shift of production to regions with abundant green electricity, and the exit of companies unable to keep pace with product upgrades [2] Market Dynamics - Domestic lithium battery companies are accelerating their overseas market penetration, with companies like CATL, Fudi Battery, and EVE Energy establishing bases in regions such as Spain and the US, which is also driving the export of phosphate cathode materials [2] Equipment and Technology - The phosphate cathode materials sector is a key growth driver for the sand mill system, accounting for over 80% of the total market size. The market for lithium battery sand mill systems in China is projected to reach 2.8 billion yuan in 2024, with a year-on-year growth of 6% [3] - The revenue scale for sand mill systems used in phosphate cathode materials is expected to be 1.5 billion yuan in 2024 [3] Competitive Landscape - The sand mill manufacturing industry in China is characterized by a fragmented market with many small players. Companies that secure large customer orders tend to have a stronger market position [4] - According to research, Huahui Intelligent is expected to hold a 29% market share in the lithium battery sand mill system sector in 2024, ranking first in the industry [4]