LFP prices run weakly with the Li2CO3 in the short term

In March, with the market recovery, the demand for LFP is gradually recovering, and some manufacturers have increased their production expectations, leading to an upward trend in production for top-tier ones. From the supply side, there is still an expectation of a potential increase in the cost of iron phosphate raw materials in the future, and processing fees have little impact on the price of LFP in the short term; In terms of lithium carbonate, the pace of replenishment by LFP manufacturers has slowed down due to the increase in customer supply in March, coupled with price expectations, and the gradual arrival of lithium salts from customers. The price of lithium carbonate is expected to fluctuate weakly, and that of LFP is expected to follow by the trend of lithium carbonate prices in the short term.

In 2025, most LFP enterprises have completed the production capacity layout, and top-tier ones are at a high production capacity and integration level. At present, the upstream and downstream supply chains have basically stabilized. Meanwhile, the prices of Iron phosphate increased Yuan 300-500/tonne, and the fabrication charges offered by LFP producers generally rose Yuan 500-1,500/t.

As of February 27th, the price of Mysteel's LFP power type was Yuan 34,500-37,500/t, with a market average price unchanged from the previous working day. The price of LFP energy storage type was stable at Yuan 33,000-34,400/t on day. At present, LFP manufacturers were firm to fabrication charges, the market demand for high-end LFP products improved, and high voltage solid products maintained high prices. In addition, most producers would like to reduce the production due to high cost and continuous suffering losses. As a result, LFP manufactures were unwilling to accept low-priced orders.

China's LFP production stood at 260,400 tons in January, a decrease of 5.25% compared to the previous month, according to Mysteel survey. On one hand, most producers were on Chinese New Year holiday in late January, resulting in a decrease in the production. However, the overall demand in January was optimistic, thus the overall reduction was not significant.

In addition, the LFP production may move down in February due to fewer working days and lower operating rates. It is expected that the production will rebound to 260,000 tonnes in March compared to February. After the holiday, most LFP enterprises will return to normal production, and the operating rates move up also. Meanwhile, LFP enterprises have adjusted their production expectations for the first half of the year and are optimistic about the future market.

According to the current market price of lithium carbonate, the theoretical processing cost of liquid-phase method is about Yuan 37,035/t, with a negative profit of about Yuan 1,535/t. As for the solid-phase processing, the cost reaches Yuan 37,473/t, with a negative profit of about Yuan 1,973/t.

Overall, the demand for LFP market will become better in 2025. At present, the overall price adjustment of LFP is still difficult under the premise of sustained growth in market demand, waiting for the release of new production capacity, cost support.

Edited by Cassie Li, lixiangying@mysteel.com