SMM

In November, China's LFP production increased 10% MoM and over 150% YoY. Supply side, LFP enterprises showed high production enthusiasm, with most first-tier and second-tier enterprises having full order books. Unlike previous years, at the end of Q4, LFP enterprises no longer focused on reducing production to control inventory levels. Instead, driven by downstream demand, they increased production to ensure sufficient product supply, aiming for higher year-end shipments to conclude 2024 successfully. Demand side, the NEV market demand will be boosted by year-end promotions and various regional policy subsidies, while the energy storage market demand will be more affected by seasonal factors, especially the domestic year-end grid connection deadline (December 30) and the more pronounced year-end rush for installations overseas. Overall, these factors led to a 10% increase in the LFP market in November, with December's expected production maintaining a similar level to November. December LFP production is expected to remain stable MoM and increase nearly 200% YoY.