China LFP demand to jump 20-30% in Mar

It is anticipated that LFP prices and demand will continue their upward trend. After the holiday, manufacturers will face the upcoming peak season, creating demand for advance raw material stockpiling. Simultaneously, strong demand from the battery cell sector is expected in March, with a potential increase of 20%-30% compared to February, continuing the dual-wheel drive pattern of power batteries &energy storage. Supported by this demand, LFP prices are expected to rise further. Moving forward, close attention should be paid to the impact of downstream stocking rhythms and raw material price transmission on demand.

During the Chinese New Year holiday, the lithium iron phosphate (LFP) industry exhibited overall characteristics of stable production and under pressure on prices.

In terms of LFP prices, they weakened slightly in the week prior to the holiday. Before the holiday, the lithium carbonate market maintained a tight balance, with upward price momentum dependent on downstream stocking schedules. Due to logistics companies suspending operations earlier for the holiday, LFP manufacturers completed their holiday stockpiling in advance, leading to a subdued trading atmosphere in the market. On the supply side for iron phosphate, a tight supply situation persisted, with prices expected to rise modestly. However, there is a certain time lag in passing through price increases along the upstream and downstream chain, so fabrication charges remained temporarily stable in the short term. Overall, LFP prices faced downward pressure, fluctuating in line with lithium carbonate price movements.

Regarding the supply side, the market showed a characteristic of a "not-so-off peak-season." Most producers maintained normal production levels. While some of them experienced reduced operating rates due to holiday closures or maintenance shutdowns, overall market feedback indicated positive order flows. LFP production for February 2026 is estimated at 383,200 tonnes.

Market Outlook:

It is anticipated that LFP prices and demand will continue their upward trend. After the holiday, manufacturers will face the upcoming peak season, creating demand for advance raw material stockpiling. Simultaneously, strong demand from the battery cell sector is expected in March, with a potential increase of 20%-30% compared to February, continuing the dual-wheel drive pattern of power batteries & energy storage. Supported by this demand, LFP prices are expected to rise further. Moving forward, close attention should be paid to the impact of downstream stocking rhythms and raw material price transmission on demand.

Edited by Cassie Li, lixiangying@mysteel.com