On December 2nd, the Shanghai Stock Exchange News reporter learned from the market that recently, several leading companies in the lithium iron phosphate industry have proposed a price increase.

A leading lithium iron phosphate company recently announced a price adjustment plan, stating that starting from January 1, 2026, the processing fee for the company's entire series of lithium iron phosphate products will be increased by 3,000 RMB/ton (untaxed) on the existing basis. If there are significant fluctuations in the market or raw material prices, the product price will be re-negotiated.

This is just a microcosm. A person in the lithium iron phosphate industry told reporters that the recent price increase plans of various companies are the rational demands of lithium iron phosphate enterprises, but how much will eventually be implemented depends on the specific results of the negotiations and consultations in the industrial chain. "For a long time, the lithium iron phosphate industry has been the 'sandwich layer' in the industrial chain, squeezed from both ends, and has been generally in a loss state in recent years. Only when the lithium iron phosphate industry achieves healthy and orderly development can it ultimately benefit the long-term high-quality development of the lithium battery industry chain."

Lithium iron phosphate leaders are raising prices

In addition to the price increase of the leading enterprises mentioned above, market information shows that starting from January 1, 2026, the processing fee for Andatech's full range of lithium iron phosphate products (including core categories such as cathode materials), will be increased by 3,000 RMB/ton (untaxed) on the basis of the existing settlement benchmark.

Another leading lithium iron phosphate company has already increased its prices in November. The letter shows that starting from November 1, 2025, the processing fee for the company's lithium iron phosphate products will increase by 3,000 RMB/ton (untaxed). For orders signed and effective before November 1, 2025, the original contract stipulated price will still be executed.

Anda Technology recently stated that the futures price of lithium carbonate is currently in an upward phase, and the company's purchase price of spot lithium carbonate has also increased. The selling price of the company's products will fluctuate and adjust accordingly with the changes in the price of lithium carbonate, so the current selling price of the company's products has correspondingly increased. Lithium carbonate is one of the main raw materials for lithium iron phosphate, and the fluctuation of the price of lithium carbonate leads to the same direction of fluctuation in the price of lithium iron phosphate, and the company's operating income also fluctuates accordingly. Therefore, the impact of the fluctuation of lithium carbonate prices on the company's performance depends on whether it can fully transmit to the downstream.

In addition to the factors of rising raw material prices, recently, the contradiction between supply and demand in the lithium iron phosphate industry has gradually increased.

It was learned from interviews with journalists that today, the market supply of lithium iron phosphate is tight, but it is difficult for enterprises to continue to expand production to ensure supply. Benefiting from the outbreak of downstream new energy vehicles and energy storage demand, the current industry effective capacity utilization rate has increased to more than 95%, and leading enterprises have all reached full production. Some leading enterprises have an utilization rate of more than 100% in the first three quarters, but there has been a serious supply shortage since September. At the same time, the industry's average debt ratio is as high as 67%, and the next expansion of production to ensure supply will face huge financial pressure.

At present, the lithium iron phosphate industry is actively responding to the industry's "anti-internal folding" initiative. Recently, the China Power Battery Association issued a call for collaborative action, urging the reconstruction of market pricing logic based on cost indices to curb the "internal folding" vicious competition.

According to the "Phosphorite Iron Lithium Material Industry Cost Research" seminar held by the China Chemical and Physical Power Industry Association on November 18, it was disclosed that from January to September 2025, the market selection average method and the market share weighted method of phosphorite iron lithium was 15,714.8 RMB/ton to 16,439.3 RMB/ton (untaxed) as the industry average cost range. In accordance with the requirements of the association's "Notice on Referencing the Phosphorite Iron Lithium Cost Index and Regulating Industry Development" on November 20, phosphorite iron lithium enterprises should not break through the cost red line to carry out low-price dumping, and resolutely curb the industry's vicious low-price competition.

The transition from "scale competition" to "quality competition"

A lithium iron phosphate industry researcher believes that in response to the industry's call to promote the industry from "scale competition" to "quality competition", the adjustment of prices by industry leading enterprises is a necessary measure to practice the "anti-internal competition" governance policy and to conform to the industry's standardized development.

In the investor relations activity record disclosed on December 2, Hunan Yuneeng stated that the relevant measures of the industry association are of great positive significance for curbing the irrational low-price competition in the industry and guiding the industry towards sustainable and high-quality development. At the same time, based on the market situation where the company's product supply is insufficient to meet demand, especially the prominent contradiction between supply and demand of new product series, and the pressure brought by the rise in the prices of some raw materials, the company has conducted business negotiations with customers, and has achieved good results.

In a previous institutional research, Wanrun New Energy replied that "involutional" competition not only affects the long-term competitiveness of the industry, interferes with market order, but also hinders the benign cycle of the economy. The industry association's organization of the industry seminar and related notifications this time is a concrete practice to implement and promote the high-quality development of the industry. The member enterprises of the association, including the company, implement the above cost red line for sales pricing, which can help improve the quality of operations and effectively improve the level of profitability. Therefore, the company will take substantive actions to implement the association's requirements, and make business decisions with the goal of enhancing the company's profitability, continuously improving product competitiveness, and promoting the benign development of the industry.

Wanrun New Energy introduced that the downstream energy storage and power market continues to be highly prosperous, especially with the joint catalysis of policy promotion, economy of scale, and the increasing number of new incremental scenarios such as AIDC storage, the demand for lithium iron phosphate products in the storage market has increased significantly. At the same time, the industry as a whole has been profitable for more than two years, and the expansion of production has slowed down. In the third quarter of 2025, the company's comprehensive gross profit margin increased compared to the same period last year, and the loss is gradually narrowing. Currently, the company has conducted business negotiations with customers and has achieved positive results.

In the past two years, lithium iron phosphate has been the absolute main force of the positive electrode material in the four main materials of lithium battery. Data from the China Automotive Power Battery Innovation Alliance shows that in the first three quarters of this year, the market share of lithium iron phosphate batteries in the power battery field reached 81.5%, a year-on-year increase of 62.7%, and it has been firmly established as the mainstream technology route. In the field of lithium batteries for energy storage, the market share of lithium iron phosphate has reached 99.9%.

Lithium iron phosphate is also one of China's core advantage industries. According to the market statistics data on key materials of global batteries released by the research institution SNE Research in the first half of 2025, the top suppliers in the global lithium iron phosphate positive electrode material loading volume are all Chinese enterprises, with a market share of about 95%.

At the above seminar, the relevant person in charge of the China Chemical and Physical Power Source Industry Association disclosed a set of data: by 2024, the domestic production capacity of lithium iron phosphate positive electrode materials approached 4.7 million tons (about 34% year-on-year growth), the actual output was more than 2.3 million tons, and the capacity utilization rate was about 50%; from the end of 2022 to August 2025, the price of lithium iron phosphate materials fell from 173,000 RMB/ton to 34,000 RMB/ton, a decrease of 80.2%, and the whole industry has been making losses for more than 36 months continuously, and the average asset-liability ratio of 6 listed companies reached as high as 67.81%.

Recently, the prices of different types of lithium iron phosphate products have all shown an upward trend. As of December 1st, according to data from the Yangtze River Non-Ferrous Metals Network, the spot average price of lithium iron phosphate for power batteries has risen to 39,950 RMB/ton, with a price range of 38,400 RMB/ton to 41,500 RMB/ton; the spot average price of lithium iron phosphate for energy storage has also increased to 36,950 RMB/ton, with a price range of 35,300 RMB/ton to 38,600 RMB/ton.

Andada Technology believes that the lithium iron phosphate industry is indeed facing pressure from overcapacity, but this is more structural: on the one hand, there is a shortage of high-end capacity; on the other hand, a large number of low-end, technologically backward capacities are likely to be accelerated and cleared, and the future may see a situation of survival of the fittest.

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