China's Iron Phosphate Output Soared in H1 2022, with Hunan Yuneng Ranking First

SHANGHAI, Jul 26 (SMM) - Except for March, iron phosphate production in each month in the first half of the year achieved positive month-on-month growth. The outbreak of the pandemic in March led to poor end demand and hampered transportation, forcing some iron phosphate plants to cut output or carry out maintenance. 

As the impact of the pandemic gradually subsided, the domestic iron phosphate production exceeded 50,000 mt for the first time in June 2022, hitting a record high of 52,194 mt, a month-on-month increase of 16.8%.

Despite the impact of the pandemic and sharp rise in raw material prices, iron phosphate production and sales rose significantly in the first half of 2022, boosted by booming NEV market and release of new production capacity of some major iron phosphate plants.

The iron phosphate market has gradually transitioned to a state of tight balance from last year's supply deficit.

Most iron phosphate plants ran at full capacity from January to February due to strong end demand before the Chinese New Year, with the monthly output at above 40,000 mt.

From March to April, the pandemic began to spread across the country. Shenzhen, Liaoning, the Yangtze River Delta region were in a lockdown in order to contain the pandemic. Some battery and car companies were closed due to the pandemic or supply chain crisis caused by the pandemic. Some companies destocked LFP and batteries, and the ripple effect was passed through to upstream iron phosphate. 

From May to June, as the impact of the pandemic gradually weakened, the downstream purchase of LFP and iron phosphate gradually resumed, allowing iron phosphate output to exceed 50,000 mt.

The iron phosphate market was highly concentrated in H1 2022.

The top three producers took up 40% of the market share, while the top five producers accounted for 60%. There were 8 manufacturers whose output reached more than 10,000 mt.

Judging from the current situation, Hunan Yuneng, as the current leader in the domestic LFP market, still ranks first in its iron phosphate output, followed by Hunan Yacheng, Hubei Wanrun, Tongling Nayuan, Qixing Optoelectronics, Guizhou Anda and Tianci New Materials, who are the second-tier producers. The overall pattern of the iron phosphate market has not changed much when compared with H2 2021.

However, due to the rapid expansion of production capacity in the iron phosphate market, the shortage of iron phosphate production capacity will be fundamentally solved by the end of H2, and the industry pattern may change significantly by then. The new projects of Yunnan Yuneng, Yuntianhua, LB Group, Tianci Materials, Yunxiang Juneng, and Chanhen Holdings, are about to be put into operation, with capacity ranging from 50,000 mt to 100,000 mt.