Price trends
According to the Commodity Market Analysis System of SunSirs, as of September 14, the price of premium-grade power-type ferrous lithium phosphate (LFP) stood at 56,666 RMB/ton, with limited overall fluctuation. Trading in the spot market was driven primarily by essential demand. Early in the week, cathode manufacturers raised their quotes consecutively, buoyed by the stabilization and rebound of lithium carbonate prices and expectations for the "Golden September" peak season; however, as downstream demand failed to meet expectations and lithium prices pulled back, LFP prices fell rapidly, resulting in a significant drop in spot market quotes.
Market Analysis
Regarding operating rates: New capacity came online and ramped up last week, leading to a slight increase in supply and generally ample market availability. Traders who had previously stocked up at lower prices sold off holdings as prices rose, further increasing the volume of circulating stock. Operating rates showed a stark divergence: leading integrated enterprises—such as Hunan Yuneng and Defang Nano—operated at 95%-100% capacity, achieving full production and sales with delivery lead times shortened to under seven days; conversely, small and medium-sized manufacturers, lacking capacity for high-end, high-tap-density products, generally operated at less than 50% capacity, with some scaling back production or halting operations entirely. In terms of industry-wide figures, the average capacity utilization rate for the first half of the year was approximately 75%, though CSC Financial estimates the industry's average operating rate for July at around 90%.
Regarding costs: The lithium carbonate market saw a significant decline in early September. The benchmark price for battery-grade lithium carbonate tracked by SunSirs fell from 156,000 RMB/ton at the start of the month to 143,000 RMB/ton on September 7 (a drop of 8.3%), with a maximum single-day decline of 7,000 RMB/ton. Meanwhile, the main futures contract experienced wide fluctuations and a downward trend last week, retreating from 142,000 RMB/ton on Monday to 134,800 RMB/ton on Friday—a weekly decline of approximately 5%—after briefly dipping toward the 128,000 RMB/ton level during intraday trading.
Regarding demand: Total demand continues to grow, though the short-term pace has fallen short of market expectations. For power batteries, domestic installations reached 335.6 GWh in the first half of the year (up 12%), with LFP batteries accounting for 272 GWh (an 81% share); demand has shifted from a focus on scale to a focus on quality, with incremental growth driven largely by commercial vehicles and exports. In the energy storage sector (a key growth engine), domestic shipments of lithium-ion batteries totaled approximately 485 GWh in the first half of the year—an increase of over 80% year-on-year—yet the pace of domestic tenders for large-scale storage has recently slowed, and the release of overseas orders has been sluggish, limiting short-term consumption. Regarding vehicle procurement strategies, new energy vehicle manufacturers are primarily purchasing based on immediate needs rather than building up large inventories, and they show limited willingness to accept high raw material prices.
Market Outlook:
Analysts at SunSirs believe that in the short term (late September through October), pre-holiday stockpiling will provide a floor for the market, though standard-grade materials remain under pressure. Prices are expected to fluctuate within the ranges of 54,000-58,000 RMB/ton for power-grade and 53,000-56,000 RMB/ton for energy-storage-grade material. Following the conclusion of Mid-Autumn Festival and National Day stockpiling, if production schedules for the energy storage sector fall short of expectations, there is potential for a slight further decline in the prices of standard second- and third-generation materials.
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