LFP Prices Rose to 5,200 yuan/mt in End-July

SHANGHAI, Aug 2 (SMM) - The prices of LFP for motive batteries rose by around 2,000 yuan/mt or 4% from the 5,000 yuan/mt in early July to 5,200 yuan/mt as of the end of July.

LFP prices increased slightly at the beginning of July as some downstream battery companies were restocking raw materials for the production in H2.

By mid-July, the prices of lithium carbonate and iron phosphate both rose sharply.

Yunnan launched the second round of power curtailment in mid-July, which led to a sharp decline in the operating rates of local yellow phosphorus producers. Since Yunnan is the production centre of the phosphorous chemical industry, the production cut resulted in the tight spot supply, and the prices of yellow phosphorus went up.

Prices of iron phosphate rose along with the raw material prices by 1,000-2,000 yuan/mt to 13,500-14,500 yuan/mt. Some plants quoted 16,000-17,000 yuan/mt, but transactions were scarce in this range.

At the same time, some upstream lithium carbonate traders held back cargoes, and the prices of industrial-grade lithium carbonate increased. The downstream LFP producer had low iron phosphate stocks, and part of the inventory was replenished in the middle of the month, which drove up the LFP prices.

Most yellow phosphorus plants in Yunnan were required to cut power again by the end of July, and operating rates dropped further. Market inventories stood low, and some phosphoric acid plants in Sichuan and Hubei suspended production. Many iron phosphate plants raised quotations again to around 16,000 yuan/mt.

Most LFP plants still intent to lift prices, as the raw material prices go up, downstream demand stand high against tight supply, and LFP profits are low. LFP prices are expected to rise further with the restocking of downstream battery companies.