GGII: The price of lithium iron phosphate materials is expected to hit bottom and then rebound in 2025.

On April 2nd, GGII Lithium Battery Research Institute issued a statement, stating that the following characteristics will be present in the Chinese lithium iron phosphate cathode material industry in 2024: 1) Processing fees and prices will bottom out, with a rebound expected in early 2025; 2) High-performance lithium iron phosphate materials will see a rapid increase in shipments; 3) Market share of lithium iron phosphate materials in cathode materials will further expand. 1. Processing fees and prices will bottom out, with prices starting to rise in early 2025. Data from GGII shows that in 2024, the price of lithium iron phosphate cathode materials was below 40,000 RMB/ton, with some low-end products even dropping to 30,000 RMB/ton. With the expected rebound in lithium carbonate prices and the logic of material processing fee recovery becoming apparent, prices have started to rise in early 2025. It is expected that by the end of 2025 to early 2026, the price of lithium iron phosphate materials will return to over 40,000 RMB/ton, returning to a reasonable price range. 2. In 2024, high-performance lithium iron phosphate materials saw a rapid increase in shipments. Companies such as Hunan Yuneng New Energy Battery Material and Fulin Precision achieved large-scale shipments of 2.6g/cm3 high-density lithium iron phosphate products in 2024. At the same time, companies like Changzhou Lithium Source and Rongtong Gaoke have been shipping nearly 10,000 tons of multiplier-type lithium iron phosphate materials annually in the power and high-altitude energy storage fields. 3. The market share of lithium iron phosphate materials in cathode materials is further expanding: GGII research data shows that in 2024, China's lithium iron phosphate material shipment volume reached 2.46 million tons, a year-on-year increase of 49.3%, accounting for 74% of the cathode material shipment volume, an increase of 7.1 percentage points year-on-year. The reasons for the increase in market share are: 1) The performance bottlenecks of lithium iron phosphate batteries such as fast charging and low temperature have been alleviated, with the installation of lithium iron phosphate batteries in power batteries approaching 75%; 2) The demand for lithium batteries in the energy storage sector has surged (shipment volume increased by 64% year-on-year); 3) European and American automakers are accelerating the mass production of lithium iron phosphate vehicle models. GGII predicts the following characteristics for the lithium iron phosphate materials industry in 2025: 1) With the rise in nickel and cobalt prices, the market share of lithium iron phosphate materials will further expand; 2) Losses for lithium iron phosphate materials companies will narrow, but most companies will still experience losses; 3) Some companies will exit the market, but production capacity will remain abundant; 4) With abundant production capacity, downstream companies will increasingly favor high-quality products, leading to a continuous acceleration of the application of high-end lithium iron phosphate materials.