In November, China's LFP production was 114,000 mt, down 10% MoM and 5% YoY, with January-November total up 34% YoY. Q4 2023 saw lithium carbonate prices fall, prompting battery cell manufacturers to reduce inventories, which lowered LFP demand. The primary raw material's price drop in November also reduced LFP manufacturing costs. LFP producers continued aligning output with sales, minimizing finished goods inventory, significantly cutting total market supply.
As the year ends, NEV and energy storage sectors are clearing finished goods inventory, only making necessary purchases, thus limiting LFP material demand. From December to Q1 2024, the market is expected to enter its traditional off-season with a bearish outlook, reducing LFP demand. Many LFP producers are cutting back or stopping production, which will significantly lower output. December 2023's LFP production in China is expected to drop to 91,050 mt, down 20% MoM and 10% YoY, marking the first time since May 2023 that monthly LFP production will fall below 100,000 mt.
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