SHANGHAI, Feb 3 (SMM) - After the Chinese New Year, the overall  LFP market was cold as the downstream demand did not improved significantly. Although the current LFP market performed better than ternary cathode materials market, the overall operating rates remained low in January, and prices were still declining.

SMM expects that the LFP prices will continue to decline.

On the supply side, LFP plants lowered their operating rates and consumed their inventory amid the weak downstream demand. In terms of raw material costs, the LFP prices were closely related to the lithium salts prices. Under the current low operating rates, most lithium salt inventory was still high and the short-term demand was low. Therefore, the market outlook may weaken further. In light of the declining quotations offered by cell LFP plants, the iron phosphate prices dropped further. Under the background of oversupply, there is still room for downside in the later stage. On the demand side, according to SMM understanding, in the case of high inventory of battery cells and car manufacturers, the decline in the inventory in January was not as good as expected and the downstream demand did not show a significant recovery trend in early February. Although the current market performance of energy storage was better than that of power battery, the overall demand of energy storage accounted for a small proportion, which made it difficult to provide effective support. The overall market demand is still in recovery.