SMM

Entering December, the LFP market continues to exhibit high prosperity. Although its prices have followed the downward trend of lithium carbonate prices, this has not dampened the overall market enthusiasm. Last week, the operating rates of leading LFP enterprises remained at high levels, reflecting strong market demand and stable production.

Regarding processing fees, no significant adjustments have been observed so far. SMM believes that adjustments to processing fees may occur after the conclusion of annual bidding and order negotiations. This expectation has brought a certain level of wait-and-see sentiment to the market while leaving room for future price adjustments.

Notably, while battery cell manufacturers may make slight adjustments in order allocation among suppliers, the total demand for LFP from leading battery cell manufacturers is not expected to decline significantly. This stable demand provides a solid foundation for the LFP market, fostering optimism about the market outlook for December.

Overall, the LFP market continued on a high prosperity trajectory last week, with no signs of order declines. However, market dynamics still require close monitoring, particularly regarding processing fee adjustments, raw material price fluctuations, and battery cell manufacturers' order allocations. The LFP market is expected to maintain stable growth in the near term.

In the iron phosphate sector, December saw a clear upward trend in market prices. Influenced by tight industrial ammonium supply and its rising prices, the cost of ammonium-based iron phosphate has been increasing, leading to higher quotes. Additionally, prices for iron-based and sodium-based iron phosphate have also risen in line with market trends. With phosphate prices remaining high, the supply shortage of high-quality iron phosphate has become more pronounced.

Recently, as the downstream LFP market recovers, demand for iron phosphate has been steadily increasing. Many iron phosphate enterprises are facing short-term capacity constraints, and the shift in the supply-demand relationship has given companies confidence to stand firm on quotes. Overall, cost-driven and demand-driven factors are jointly influencing the market, resulting in a significant upward trend in iron phosphate prices.

Looking ahead, close attention should be paid to price dynamics of industrial ammonium and phosphate as raw materials, as well as demand changes in the downstream LFP market. Under the backdrop of tight supply and demand, iron phosphate market prices are expected to remain firm. However, as capacity further expands and winter stockpiling of industrial ammonium concludes, the market supply-demand balance may shift again by year-end. SMM will continue to monitor developments.