SMM analysis on China June LFP output and July forecast

In June, China's LFP production was 180,020 mt, down 9% MoM and up 28% YoY. Supply side, leading companies that reported high production in early Q2 saw a decrease in June, primarily focusing on reducing inventory. However, some LFP producers experienced an increase in orders due to changes in customer demand. Demand side, June was a critical period for downstream end-users and battery cell makers to reduce inventory. Orders for upstream LFP producers declined, and LFP was in the off-season. Due to weakened demand and efforts to reduce inventory and boost sales, a price war to grab orders was inevitable in June.

Feedback from LFP producers in July indicated that the situation would not differ much from June, with no significant positive news in the market. The overall trend is expected to decline slightly, with an estimated LFP production of 172,960 mt in July, down 4% MoM and up 25% YoY.