China’s LFP Production Review In July And Forecast In August

SHANGHAI, Aug 10 (SMM) –

In July, China's LFP production amounted to 138,890 mt, reflecting a month-on-month change of -1.6% and a year-on-year increase of 49.7%. Output for January-July rose 54.99% YoY. On the cost side, the price of the main raw material, lithium carbonate, continuously declined in the latter half of July, while the price of iron phosphate remained stable, thereby leading to a decrease in production costs.
On the supply side, considering the potential impact of high-temperature and power restrictions at the end of July, some companies modestly increased their inventory. However, as the price of lithium carbonate fell, battery factories prolonged their procurement timelines, and LFP enterprises reduced production volumes. Overall, this resulted in a slight decrease in supply.
In terms of demand, due to the decline in raw material prices, battery enterprises displayed a tendency to buy more when prices kept rising and hold off when prices were in downward trend, leading to a stronger wait-and-see sentiment. In August, the risk of high-temperature and power restrictions continues to be present, causing downstream and end-user supply and demand to be lower than expected.
It's projected that LFP production in August 2023 will be approximately 133,450 mt, signifying a slight month-on-month decrease of 3.9%, yet a year-on-year increase of 47.5%.