1、 Price trend

As of October 16th, the price of high-quality power type lithium iron phosphate is 50000 yuan/ton. Today, the domestic lithium iron phosphate market maintains structural differentiation, with weak transactions for ordinary low compaction products and price pressure. The supply of high-pressure solid power and long cycle energy storage brands is tight, maintaining a premium. Currently, the mainstream transactions for power type lithium iron phosphate are 52000-55000 yuan/ton, and 51500-53000 yuan/ton for energy storage type. The market is mainly focused on long-term contract order delivery, with few individual transactions. Battery companies maintain on-demand procurement and adopt a wait-and-see attitude.
2、 Market analysis
Operating rate: The industry has obvious differentiation in operating rates, with sufficient orders from top integrated large factories and high operating rates of 85% -92% for equipment. Priority is given to ensuring the production of high-pressure solid and energy storage special materials. Small and medium-sized non integrated enterprises are affected by insufficient orders and profit compression, and operating rates are maintained at a low level of 45% -60%. Some small factories are temporarily reducing loads and conducting maintenance and production control. The overall industry average operating rate is about 70%. At the inventory level, low-end ordinary brand inventory accumulates, and there is a high pressure to reduce inventory. High end high-pressure physical product inventory is low, and delivery cycles are prolonged. There is currently no concentrated release of new production capacity in the short term.
Upstream costs: The core raw material lithium carbonate continues to operate weakly today, with prices falling, weakening the cost support for lithium iron phosphate; The price range of iron phosphate fluctuates, while the supply of raw materials such as phosphate ore and ferrous sulfate is stable with limited fluctuations. Integrated enterprises rely on their own phosphate ore and supporting iron phosphate production lines, with outstanding advantages in raw material costs; Small and medium-sized manufacturers that purchase raw materials for production continue to see their processing profits compressed. Overall, the downward trend in lithium prices has dragged down the overall cost center and loosened the bottom support for iron and lithium. However, there is currently no significant downward space for the phosphorus source end, and a weak balance pattern has formed on the cost end.
In terms of demand: downstream battery industry differentiation, new energy vehicle power batteries: domestic vehicle production is stable, terminal new energy vehicle promotion continues, battery factories mainly consume raw material inventory in the early stage, cautious in new procurement, use as needed, and no centralized replenishment; Overseas power orders remain stable. The energy storage sector is the main increment. Domestic energy storage bidding continues to land, overseas energy storage orders are increasing, and the demand for long cycle energy storage lithium iron phosphate is strong. Top material companies are locking in long-term orders until the following quarters. However, the inventory of battery finished products is high, and battery cell factories have a strong willingness to lower prices, resulting in weak bargaining power for low-end materials. Overall demand presents a pattern of strong energy storage, stable ordinary power, and weak low-end demand.
3、 Future forecast
Analysts believe that in the short term, the structural differentiation of lithium iron phosphate continues, with ordinary grades under pressure and fluctuating. High end energy storage and high-pressure real power materials remain strong. Negative factors include overcapacity at the low-end of the industry, weak lithium carbonate prices dragging down the cost side, and no significant explosion in terminal consumption of power batteries. Battery companies maintain a low inventory strategy, and there is significant resistance to the upward trend of ordinary grade prices.