In December 2025, China's domestic lithium iron phosphate (LFP) production reached 422,700 tonnes, marking a month-on-month increase of 3.65%, according to Mysteel's survey. Sustained strong demand throughout the month prompted most manufacturers to maintain full-capacity operations, although some experienced reduced output due to production line incidents or maintenance. Nonetheless, supported by the steady ramp-up of new capacity in Hubei Province, overall LFP production continued to rise.
Mysteel's survey of the production scheduling suggests that, China's LFP production for January 2026 is projected at 376,200 tonnes, a month-on-month decrease of 11.00%. This decline is attributed to production reduction and maintenance activities undertaken by cathode factories to ensure safe, stable, and efficient operations, as many lines had been operating beyond capacity.
Source: Mysteel
This move is perceived by the industry as cathode producers strengthening their bargaining position for higher processing charges, which also indirectly signals confidence in the market outlook. Sources indicate that negotiations between cathode producers and major downstream battery manufacturers are ongoing, with some companies having already accepted proposals for a processing charge increase of Yuan 1,000 per tonne.
Moving forward, market participants are advised to closely monitor the actual operating rates of cathode producers, particularly in the context of potential profit recovery.
Currently, five leading LFP companies have successively announced production reduction and maintenance plans. In detail, Hunan Yuneng plans to suspend the production for one month starting January 1, 2026, with an expected production reduction of 15,000-35,000 tonnes. Similarly, Wanrun New Energy will undergo a one-month maintenance starting December 28, 2025, estimating a reduction in LFP output by 5,000-20,000 tonnes. Dynanonic has scheduled a one-month maintenance beginning January 1, 2026, aimed at ensuring optimal operational efficiency of its equipment. Anada Technology also plans a one-month maintenance starting January 1, 2026, with an expected reduction in LFP production by 3,000-5,000 tonnes. Lastly, Lopal Technology will conduct a one-month maintenance from January 1, 2026, which is projected to cut LFP output by approximately 5,000 tonnes.
Source: Mysteel
Written by Aggie Hu, huchenying@mysteel.com
