CATL's "Advance Payment": High-Pressure Dense LFP in "Undersupply"

High-compaction-density LFP materials, as a key to enhancing battery fast-charging performance while maintaining high energy density, are becoming a focal point of technological competition among industry chain enterprises.

Previously, CATL launched the Shenxing ultra-fast charging battery, achieving the first-ever 4C ultra-fast charging for LFP batteries. Subsequently, it introduced Shenxing PLUS, which employs particle grading technology to "place each nanoparticle in the right position," achieving ultra-high compaction density. This enabled Shenxing PLUS to achieve a system energy density of 205 Wh/kg on the basis of 4C ultra-fast charging.

According to industry insiders, CATL will prioritize the market promotion of its Shenxing battery series in 2025, aiming for these products to account for 50%-60% of its LFP battery shipments, with the second-generation Shenxing battery set to launch by the end of 2025.

Notably, SAIC-GM General Manager Xiao Lu recently revealed that the 6C ultra-fast charging LFP battery jointly developed by SAIC-GM and CATL will be put into use this year on the newly upgraded Ultium platform, which supports nearly 900V. Additionally, reports indicate that BYD will also launch its second-generation blade battery in 2025, while planning to introduce a 6C fast-charging battery.

The simultaneous actions of these two industry leaders will undoubtedly increase the demand for high-compaction-density LFP materials.

"This demand is not limited to the power sector but also includes the introduction of large-capacity ESS products, with demand for high-compaction-density LFP materials reaching 600,000 mt," said the aforementioned industry insider. Considering that BYD's second-generation blade battery is expected to account for over 20% of applications in 2025, with demand around 200,000 mt, the total market demand for high-compaction-density LFP materials in 2025 is projected to reach 800,000 mt.

What does 800,000 mt signify? For reference, according to industry statistics, the total capacity of the LFP sector is estimated at 4.1 million mt in 2024 and approximately 4.48 million mt in 2025. This means that the demand for high-compaction-density LFP will account for nearly one-fifth of the industry's annual capacity this year.

High-compaction-density LFP generally refers to materials with a compaction density above 2.6 g/cm³. In August last year, CATL provided an advance payment to Fulin Precision Machining to expand capacity, and in September, Lopal raised prices for mid-to-high-compaction-density products with a density above 2.5 g/cm³. These signals indicate a structural shortage of high-compaction-density LFP products.

Market Undersupply

"The trend of fast-charging LFP technology is evident, catalyzing demand for high-compaction-density LFP cathode materials," said an industry insider. Currently, only a few producers, such as Fulin Precision Machining, Hunan Yuneng, and Lopal, can achieve mass production of high-compaction-density products. "These products are in short supply and enjoy a premium of 3,000 yuan/mt."

Fulin Precision Machining publicly stated that its high-compaction-density LFP products have been recognized by core customers and leading OEMs. According to a research report by Huatai Securities, Fulin Precision Machining's ferrous oxalate technology route offers a relative advantage, enabling mass production of materials with a compaction density of 2.6 g/cm³, whereas traditional solid-phase or liquid-phase methods typically achieve densities between 2.4-2.6 g/cm³.

"Since 2024, Fulin Precision Machining has been the sole major supplier of cathode materials for CATL's Shenxing battery and continues to iterate toward a compaction density of 2.7 g/cm³, with a capacity to meet 250,000 mt of demand by 2025," an industry insider revealed.

With continuous iterations in LFP battery technology, Hunan Yuneng began scaling up production of products with a compaction density of 2.6-2.65 g/cm³ in 2024. According to Dongwu Securities, Hunan Yuneng's second-sintering technology leads peers by three years, with its high-compaction Y9C and Y13 products outperforming competitors in various metrics. Starting in September 2024, its high-end products accounted for nearly 30%, and this proportion is expected to rise to 40%-60% in 2025.

"The company's new Y-series high-compaction-density LFP products are primarily designed for power battery applications. By improving particle size grading technology, the materials' compaction density is effectively enhanced while ensuring capacity utilization and C-rate performance," Hunan Yuneng stated on its interactive platform.

Battery China noted that in April last year, Lopal's subsidiary Changzhou Liyuan launched its fourth-generation high-compaction-density LFP material, S501. Through innovative technologies such as optimized element doping and special sintering processes, the material achieved significant improvements in compaction and energy storage capabilities, with a powder compaction density of 2.65 g/cm³.

"Downstream demand for high-compaction-density LFP cathode materials is substantial, yet only a few companies in the market can produce them," Lopal stated. As of September 2024, such products accounted for 30%-40% of Lopal's total LFP cathode materials.

As a leader in nano-LFP materials, Defang Nano disclosed that its liquid-phase technology can produce high-compaction-density LFP products. Its new high-compaction-density products for power applications have achieved mass shipments, and its ultra-high-compaction-density products are progressing smoothly in validation.

Additionally, Battery China observed that in August last year, Shandong Jinggong Electronics applied for a patent titled "A High-Compaction High-Capacity LFP and Its Preparation Method," with the powder compaction density of its LFP materials exceeding 2.60 g/cm³. In September, Guangdong Brunp and Hunan Brunp applied for a patent titled "An LFP Cathode Material and Its Preparation Method and Application," which combines liquid-phase and solid-phase methods to achieve high-compaction-density LFP cathode materials with uniform phase composition through single-step sintering.

Higher Product Premium

High-compaction-density LFP is a "polygonal" high-performance technical material. According to Industrial Securities, fast-charging LFP batteries require thinner pole pieces to reduce internal resistance, but this reduces battery energy density. To compensate, high-compaction-density LFP cathode materials can balance energy density and fast-charging performance.

"Compared to manganese-iron-lithium batteries, which have high energy density but questionable safety, high-compaction-density batteries offer similar energy density without significantly compromising safety," said a Lopal executive. With increasing demand for fast-charging batteries and large-capacity battery cells, demand for high-compaction-density cathode materials will continue to grow in 2025. These products may face a supply-demand balance or even a shortage, leading to higher product premiums.

From a technical perspective, the second-sintering process is the mainstream method in the high-compaction-density LFP industry. Industry analysts pointed out that traditional single-sintering technology faces numerous challenges in producing high-compaction-density products, such as imprecise particle distribution, high roasting temperatures causing impurity phases, and high gas generation potentially damaging carbon coating structures. The second-sintering process, through more precise process control, achieves uniform particle distribution, reduces the proportion and size of large particles, and enhances product performance.

"After years of large-scale capacity expansion, although demand for LFP materials continues to grow, the industry as a whole remains in an oversupply situation," said an industry insider. "While overall profitability in the LFP sector is low, the robust demand for high-compaction-density LFP materials has created a significant capacity gap. Some products enjoy a premium, which could bring performance elasticity to the industry."