[SMM Analysis] Weekly Summary of China's LFP Market

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SMM reported on May 22 that the downward trend in LFP prices slowed down this week, with an overall decline of approximately 365 yuan/mt. This was mainly due to the continuous drop in lithium carbonate prices, which fell by about 1,450 yuan/mt in total this week. On the market side, material manufacturers were generally more active in production this week, with output from leading material manufacturers beginning to recover. However, production at some second-tier material manufacturers declined, primarily due to adjustments in the downstream battery cell supply chain structure and a slight decrease in downstream NEV orders. On the demand side, ESS demand continued to improve. On one hand, the US reduced tariffs on Chinese goods, prompting downstream battery cell manufacturers to rush to increase exports, resulting in a slight increase in orders. In terms of price settlement, the average price of iron phosphate showed a slight upward trend in April. Some LFP manufacturers had expectations of a price increase in processing fees for Q2, but no substantive results were achieved after negotiations and discussions with downstream battery cell manufacturers. However, as of now, the price of iron phosphate raw materials has started to decline, so a certain price reduction is expected for iron phosphate prices in May. Additionally, with some battery cell manufacturers planning to restart tenders in June, the probability of a price increase before then is low. Considering these two points, SMM expects that processing fees will be unlikely to rise in Q2.

SMM New Energy Research Team

Wang Cong 021-51666838

Ma Rui 021-51595780

Feng Disheng 021-51666714

Zhou Zhicheng 021-51666711

Wang Zihan 021-51666914

Lv Yanlin 021-20707875

Zhang Haohan 021-51666752

Wang Jie 021-51595902

Xu Yang 021-51666760

Chen Bolin 021-51666836