China’s lithium iron phosphate output rises in Aug as demand improves

[SMM Analysis] On the afternoon of April 2nd local time, according to the White House statement, the 10% "benchmark tariff" will take effect at 00:01 Eastern Time on April 5th. The higher "reciprocal tariff" targeting specific countries will come into force at 00:01 on April 9th. After the reciprocal tariff takes effect, considering all the tariff policies, the combined tariff rate for energy storage cells will reach: 3.4% basic tariff + 7.5% Section 301 tariff + 20% general tariff + 34% reciprocal tariff = 64.9%.

[SMM Analysis] On March 28, 2025, the General Office of the People's Government of Hunan Province officially issued the "Special Action Plan for Boosting Consumption in Hunan Province" (hereinafter referred to as the "Plan"), which proposes ten specific actions aimed directly at expanding consumer capacity, improving consumption quality, and stabilizing economic growth.

[SMM Analysis] This week, the prices of energy storage cells continued to remain stable, with no significant fluctuations observed in the price ranges of mainstream models.

【SMM Analysis】Hecate Energy faced rejection for a 2.4 GWh project in California, while San Diego voted against a ban on battery energy storage systems (BESS). According to search results, Escondido became the first city in San Diego County to prohibit battery energy storage sites until new land use policies and standards related to BESS are established. The city council unanimously voted on October 9 to impose a temporary restriction, initially set for 45 days, which could be extended by 10 months and 15 days, and further extended by 12 months.

According to SMM statistics, from January to June 2024, the total production of LFP reached 861,530 mt, a significant YoY increase of 60%. Overall, after the traditional market off-season in January and February, LFP production saw a notable recovery in March and April, peaked in May, and began to decline in June due to downstream inventory reduction.

Domestic output of LFP stood at 410,000 mt in 2021, up 179% year-on-year, according to SMM statistics.

The prices of SMM lithium iron phosphate (power battery) stood at 92,000 yuan/mt as of today, and the average price was 1,000 yuan/mt higher than yesterday.

Various factories have successively introduced plans for long-life energy storage batteries plan according to national policies and market requirements: the cycle life of LFP energy storage cells represented by 280Ah can reach 6000-10000 times with the iterative update of technology, while ensuring ultra-high energy efficiency.

The raw material prices, such as lithium carbonate, lithium hexafluorophosphate, solvents, and PVDF, have increased further since Q3. Prices of battery-grade and industrial-grade lithium carbonate rose 49% and 52% respectively MoM in September. LFP prices increased 23%, ternary cathode material prices gained 12% and electrolyte rose 15-18%. Ternary cathode material battery cell costs increased 8.3% in September and LFP battery cell rose 7.2% on the back of rising battery material prices. 

Social inventories of silicon metal across Huangpu port, Kunming city and Tianjin port expanded 2,000 mt from the previous week to 42,000 mt as of Friday July 30.