SMM Analysis On China July LFP Production And August Forecast  

In July, China's LFP production was 193,710 mt, up 8% MoM and 40% YoY. Supply side, July's LFP production increased compared to June, with some LFP producers resuming energy storage orders. This was mainly due to the gradual release of demand from some overseas energy storage projects. In H2, overseas energy storage projects may see a rush of installations. Additionally, the demand growth in the NEV market remained relatively flat, as some major models of new energy vehicle companies are plug-in hybrids or range extenders, which reduces the demand for LFP batteries and weakens the demand for LFP cathodes. Moreover, the increase was mainly contributed by second and third-tier LFP cathode producers, who received more orders in July, while leading companies maintained a high operating rate. The market in July still experienced price wars, with lower-priced and quality-assured companies more likely to be favoured by battery cell manufacturers.

In August, LFP scheduled production is expected to continue growing compared to July, driven by demand, with high operating rates across companies. It is estimated that China's LFP production in August will be 209,740 mt, up 8% MoM and 61% YoY.