Will LFP Battery's Price Stop Increasing In 2022

Will LFP Battery’s Price Stop Increasing In 2022

---MateLion View

From the perspective of growth driving force, the main causes of the high-speed growth of the phosphate phosphate positive material material are:

1) China's power battery shipments was 220GWH, of which LFP power battery’s shipments was over 110GWH, increased by over 250% year-on-year;

2）Under the pressure of the carbon trading market, in 2021, China's energy storage lithium battery shipments exceeded 35GWh, an increase of 120% year-on-year;

3）Driven by the power&energy storage battery market, in 2021, China's lithium iron phosphate lithium battery shipments exceeded 160GWh, an increase of 150% year-on-year, and the market demand of lithium iron phosphate material has increased significantly over 250%.

4）With the advancement of power battery technology, the structure of lithium iron phosphate battery pack has generally enabled the EV’s running range to 400-600 kilometers, and some models are eve over 650 kilometers.

5）The low temperature performance of lithium iron phosphate battery continues to improve, the advancement of lithium iron phosphate battery technology, the advancement of thermal management system and the gradual popularity of heat pump air conditioners, improved running range of EVs equipped with LFP batteries.

6) The sharp rise in the price of upstream raw materials has led to an urgent need for car and power battery companies to reduce costs. Lithium iron phosphate batteries with lower prices have replaced the higher cost of NCM batteries.

In terms of the price trend of lithium iron phosphate and iron phosphate, the overall price of lithium iron phosphate cathode material raised in 2021, with an average increase of over 100%. The main reasons are as follows:

1）Upstream raw materials are in short supply and the price rises, boosting the cost of lithium iron phosphate:

The price of battery grade lithium carbonate rose from CNY53,000/ton at the beginning of the year to arround CNY500,000/ton at present(early April 2022), nearly 10 times crazy increase!

2）The demand for lithium iron phosphate cathode material has increased significantly, and high-quality lithium iron phosphate cathode material enterprises are in full production, resulting in tight capacity supply and promoting the price of lithium iron phosphate materials.

3) The expansion cycle of iron phosphate is 12-18 months, and the expansion cycle of lithium iron phosphate is 6-8 months. Compared with lithium iron phosphate, the production capacity of iron phosphate is relatively low, resulting in the price rise of iron phosphate. 

It is expected that the market of Lithium iron phosphate and iron phosphate in China will show the following characteristics in 2022:

1）Driven by the price rise of lithium carbonate materials, the price of lithium iron phosphate is expected to break through CNY120,000/ton;

2）Driven by the growth of power and energy storage markets, lithium iron phosphate materials have become the mainstream of the market, accounting for more than 50% of lithium cathode materials. In the power lithium battery market, China's lithium iron phosphate battery is expected to account for more than 60%

3）The production capacity of lithium iron phosphate and iron phosphate is released rapidly, and the production capacity of lithium iron phosphate anode material is changed from insufficient quality to excess capacity. Iron phosphate capacity is expected to turn from insufficient to surplus by mid-2022;

4）The lithium iron phosphate material and lithium iron phosphate power battery are expected to be exported on a large scale. The core patent of lithium iron phosphate positive material has expired overseas in March 2022, which will reduce the obstacles for the overseas promotion of lithium iron phosphate battery.