[SMM analysis] the market price will remain high and stabilize after the output of lithium iron phosphate increased by 5.2% in April.

SMM5月15日讯，2021年4月，近期磷酸铁锂市场火爆行情仍在延续，下游端需求居高不下，铁锂均价较上周也有所上行。据SMM统计，4月磷酸铁锂均价月度均价为4.95万元/吨，较3月的4.66万元/吨上涨0.28万元每吨，价格环比上涨6.06%。

From the production side, China's output of lithium iron phosphate increased to 26410 tons in April, an increase of 5.2% compared with 25110 tons in March and an increase over the same period last year. The overall supply of the industry continues to maintain the trend of volume, and the new production lines of some manufacturers have also been put into production one after another. however, the overall supply and demand imbalance in the current market is still there, and the existing capacity of most enterprises is still insufficient to meet the order demand, and the tight supply of lithium iron phosphate continues in the short term. At the same time, the production capacity of iron phosphate, the key precursor material in the upstream of lithium iron phosphate, is inadequate. before, the prosperity of lithium iron phosphate industry was low, and the demand for upstream raw materials weakened, which led to the temporary closure or elimination of some iron phosphate production lines. and the iron phosphate expansion cycle is longer than iron lithium, reopening the production line also requires a verification cycle of 6-12 months, which is difficult to release in the short term, unable to form effective production capacity, resulting in a tight supply situation. At the same time, some large iron phosphate plants, such as Yuneng and Wanrun, produce iron phosphate for self-use and little circulation, so the circulation capacity of iron phosphate in the market is further compressed and, to a certain extent, the output of lithium iron phosphate downstream is limited. However, according to the enterprise's current production expansion plan, with the production capacity of some head enterprises, the shortage of iron phosphate and lithium iron phosphate may be alleviated in the fourth quarter.

On the downstream demand side, in April 2021, China's power battery production totaled 12.9 GWH, an increase of 173.7% over the same period last year and 14.6% month-on-month growth. Among them, the output of ternary batteries was 6.7GWh, accounting for 51.9 percent of the total output, an increase of 134.3 percent over the same period last year and 15.1 percent from the previous year; the output of lithium iron phosphate batteries was 6.2GWh, accounting for 47.9 percent of the total output, up 235.4 percent from the same period last year and 13.7 percent from the previous year. In terms of the overall trend, although the output of lithium iron phosphate fell slightly by 1% in April compared with the previous month, the overall demand is stable and maintains a high growth rate, and the overall output is not much different from that of ternary materials. with BYD's announcement that it will fully switch lithium iron blade batteries in the future, and the launch of a new round of new energy vehicles to the countryside, it is expected that the overall demand for lithium iron phosphate still has room to rise in the future.

Overall, the recent increase in the output and import of lithium carbonate upstream has led to relative stagflation in the price of lithium iron phosphate to a certain extent, but driven by the current lack of production capacity, the shortage of some raw materials and the overall demand, it is expected that the price of lithium iron phosphate will still stabilize at a high level in the future.