According to China Chemical Information Weekly, the supply-demand dynamics for lithium hexafluorophosphate have shifted significantly since October this year, with prices fluctuating daily and rising at a near-linear pace. Currently, the average price of lithium hexafluorophosphate has surpassed CNY160,000 per ton, and this surge continues unabated.

On November 25, the latest average quotation for LFP6 reached 160,500 RMB/ton, up CNY2,500 or 1.58% from the previous trading day, with the highest quoted price hitting 166,000 RMB/ton.

In July this year, LFP6 prices hit a yearly low of ¥47,000 per ton. The current average price of ¥160,000 per ton represents a surge of over 240% compared to July levels, and a rise exceeding 150% from the ¥63,300 per ton recorded in early October.

Supply-Demand Reversal: Multiple LFP6 Companies Operating at Full Capacity

Market consensus attributes this price surge to both rising raw material costs (lithium carbonate) and a convergence of demand growth and supply contraction. On the demand side, growth is driven by the dual engines of new energy vehicles and energy storage industries. On the supply side, prolonged low prices earlier led to significant capacity consolidation. The current lithium hexafluorophosphate industry exhibits high concentration, with China's top five companies holding approximately 70% of the market share. Effective production capacity cannot meet the explosive growth in demand.

By the end of 2024, the global effective production capacity for lithium hexafluorophosphate reached 390,000 tons, with China's effective capacity standing at 371,000 tons per year.

In 2024, most small and medium-sized enterprises in the industry could not sustain cash flow losses and remained in prolonged shutdowns. China's lithium hexafluorophosphate capacity growth fell far below expectations. Global electrolyte shipments are projected to drive lithium hexafluorophosphate demand to 249,000 tons in 2025 and 545,000 tons in 2030.

Although LFP production has seen a gradual increase in recent months, most companies have adopted a conservative approach to capacity expansion due to constraints or concerns about future price declines. Against the backdrop of rapidly surging demand, the growth rate of LFP supply has lagged behind demand growth, leading to significant inventory drawdowns in the market.

LFP6 accounts for approximately 40%-50% of electrolyte costs. Amid expectations of tight supply, rising raw material prices are increasingly impacting electrolyte production. Downstream battery manufacturers are actively securing electrolyte and LFP6 supplies through long-term contracts. On November 6, Tianci Materials announced two major orders consecutively, from Guoxuan High-Tech (002074) and Zhongxin Innovation (03931.HK), totaling 1.595 million tons of electrolyte under long-term contracts covering the next three years (2026-2028).

The tight supply-demand balance for LFP6 may persist until 2026. Long-term contracts have secured substantial future LFP6 production capacity, exacerbating supply constraints in the spot market and driving up spot prices for individual orders.

Regarding future price trends for lithium hexafluorophosphate, industry consensus suggests short-term price support remains intact. On the demand side, year-end production surges for new energy vehicles and accelerated installations for energy storage projects will provide support. Supply-side constraints persist as new capacity ramp-up requires time, with the tight supply-demand balance projected to endure until 2026.

The tight supply-demand balance for LFP6F may persist until 2026. With sustained downstream demand and gradual industry capacity rationalization, electrolyte prices are expected to steadily recover alongside costs. Although short-term gains may remain constrained by factors like overcapacity and downstream bargaining power, the long-term upward trend is now firmly established.

From a medium-to-long-term perspective, after navigating the previous industry cycle, the entire lithium battery supply chain—including LFP—has transitioned from extensive expansion to more strategic and rational planning. Consequently, orderly capacity deployment and safeguarding reasonable profit margins across the supply chain are becoming definitive trends.

Comprehensive market analysis indicates that LFP6 prices are being driven by two key factors: on the cost side, solid support from rebounding lithium carbonate prices; and on the supply side, a tightening trend unlikely to reverse in the near term. Under the combined influence of these two factors, the spot price of lithium hexafluorophosphate is expected to surge strongly toward CNY200,000 per ton. However, caution is warranted: beyond this threshold, the upward potential and momentum for lithium hexafluorophosphate prices remain subject to significant uncertainty.

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