SMM News on June 26:
The iron phosphate market continued to exhibit a complex development trend at the end of June. In terms of pricing, iron phosphate prices continued to weaken. Currently, the quoted prices for iron phosphate are hardly able to cover the full cost. Due to the increase in capacity and ongoing price wars, iron phosphate prices are further declining.
In the raw material market, the prices of industrial-grade MAP and phosphoric acid remained stable. According to SMM survey data, the application proportion of industrial-grade MAP in the new energy sector is around 40%. Although it has entered the off-season for fertilizer use, due to factors such as the expansion of iron phosphate production capacity and fertilizer exports, there is certain support for the price of industrial-grade MAP, keeping it stable. The price of phosphoric acid has temporarily stabilized due to the maturity of refined phosphoric acid technology, capacity release, and cost reduction, despite changes in downstream demand. Meanwhile, the price of ferrous sulphate has risen and supply has tightened. In a market environment where titanium dioxide demand is poor, the supply of ferrous sulphate has tightened, and the delivered price per ton in some regions may have exceeded 400 yuan. This directly increases the production costs of ammonium-based and sodium-based iron phosphate, imposing cost pressure on iron phosphate producers.
Regarding market orders, some high-priced iron phosphate enterprises are facing difficulties. To maintain operations, after lowering their prices, their order situations can only barely be sustained. In the current market pattern of oversupply, customers are extremely sensitive to prices and will switch to other suppliers if prices are slightly higher. In June, some iron phosphate enterprises presented a starkly different picture, with considerable orders and high operating rates. However, these enterprises are mostly top-tier enterprises in the industry with resource advantages and competitive product prices. For example, some enterprises reduce costs from the source by binding phosphate ore resources; some enterprises invest heavily in technological R&D and, leveraging their high-quality production capacity advantages, can also ensure profit margins.
In H2, with the capacity expansion or production recovery of some downstream enterprises, the demand for iron phosphate is expected to grow. Some NEV enterprises plan to expand their production scales, increasing the demand for LFP batteries, thereby boosting the demand for iron phosphate. The rapid development of the ESS industry also brings opportunities to the iron phosphate market, with the demand for iron phosphate from ESS batteries continuing to rise. The overall market is temporarily stable, but there are undercurrents. During mid-year tenders and order negotiations, payment term issues have attracted significant attention. Due to fierce market competition, enterprises may make concessions on payment terms to secure orders, but this also increases their own capital turnover pressure. Some enterprises face difficulties in capital recovery due to excessively long payment terms, affecting normal production and operations.
In the coming period, the iron phosphate market will continue to develop under the interplay of multiple factors such as price fluctuations, cost pressure, demand changes, and payment term risks. Enterprises need to continuously optimize their cost structures, enhance product competitiveness, and reasonably address the issue of payment terms to establish a foothold in the market.
SMM New Energy Research Team
Wang Cong 021-51666838
Ma Rui 021-51595780
Feng Disheng 021-51666714
Lv Yanlin 021-20707875
