Recent market conditions: (1) Due to strong downstream demand, iron phosphate companies have experienced delays in order deliveries, with some orders not being fulfilled on time, leading to firm or slightly rising prices. Meanwhile, some LFP companies have increased capacity, seeking outsourcing and other methods, which has driven up the operating rates of some small and medium-sized LFP companies. (2) In the October negotiation season of Q4, iron phosphate companies generally hold an optimistic outlook on the market, maintaining a bullish stance; whereas LFP companies mostly adopt a wait-and-see attitude, expecting the market to remain stable.
In Q3 2024, the price of phosphorus sources, the main raw material for iron phosphate, fluctuated due to the supply of phosphate rock, demand in the agricultural fertilizer market, and fertilizer export market. Driven by the demand for autumn fertilization and strong demand in the new energy market, the price of phosphorus resources remained firm. In Q2, the demand for monoammonium phosphate in the agricultural market increased, leading to a rise in industrial monoammonium phosphate prices. However, as Q3 began, the demand in the water-soluble fertilizer market declined, causing monoammonium phosphate prices to decrease accordingly.
The price of phosphoric acid (85%) showed a stable upward trend in Q3, with price changes of about 100 yuan per mt, affecting production costs as follows: an increase of about 80 yuan per mt for the iron and sodium processes, and an increase of 10 yuan per mt for the ammonium process. Meanwhile, the iron source market prices remained stable, but ferrous sulfate might experience slight regional price fluctuations due to resource adaptation issues. It is expected that in Q4, the prices of phosphorus sources and iron will first remain stable and then show a slight downward trend.
In Q3 2024, the production cost of iron phosphate decreased compared to Q2, showing a trend of falling back from highs. The main reasons were the high operating rate during the quarter, reduced depreciation and cost per mt, and the decline in some raw material prices, leading to an overall reduction in production costs. However, despite adopting low-price strategies to stabilize market share, iron phosphate companies still faced losses, though the extent of the losses decreased.
The high operating rate in the LFP industry drove the demand for iron phosphate. Meanwhile, LFP companies seeking low costs actively purchased lower-priced supplies, significantly reducing the inventory of iron phosphate companies. Some iron phosphate companies sold large quantities of B-grade products at low prices.
Looking ahead to Q4, downstream demand may fall back from highs, and some iron phosphate companies with high production costs and limited funding channels may face cash flow shortages. However, this situation will have limited impact on the market landscape in H2 2024, and companies can still maintain relatively stable operations.
Looking ahead to 2025, market competition will become more intense, and some companies may struggle to sustain themselves in the market, facing the risk of acquisition or elimination.
![[SMM Revisión semanal del mercado de celdas de baterías de almacenamiento de energía 9.3] La escasez de láminas de cobre limita los programas de producción de septiembre, los precios de las celdas de baterías de almacenamiento de energía se mantienen firmes](https://imgqn.smm.cn/usercenter/tKgKv20251217171725.png)
![Los precios del magnesio suben por tercera sesión consecutiva: el lado de los costos sigue "ardiendo" mientras la demanda lucha por tomar el relevo [Comentario de SMM]](https://imgqn.smm.cn/usercenter/EutUV20251217171724.jpeg)
