[SMM lithium battery] LFP market leader announces price increase! All series to raise by 2,000 yuan/mt from August 1.

SMM, July 16 news: LFP leader Hunan Yuneng issued a price adjustment letter to clients.

Hunan Yuneng stated that since March 2026, due to multiple factors such as global geopolitical fluctuations and supply chain circulation disruptions, prices of core raw materials for LFP, including sulphur, phosphoric acid, ferrous sulphate, etc., have continued to rise. Over the course of this year, iron phosphate prices have risen from about 10,000 yuan/mt at the start of the year to 15,000 yuan/mt, an increase of over 50%. Additionally, iron phosphate currently accounts for over 70% of LFP processing fees. Rising costs continue to squeeze profit margins in production and manufacturing, placing significant pressure on the company's operations and cash flow management.

Meanwhile, demand from downstream NEV and energy storage markets has grown steadily, and the supply of high-quality effective capacity in the industry remains tight. Starting in July, the industry operating rate reached 90%, with high-end capacity particularly constrained. Hunan Yuneng has operated at full capacity since completing maintenance this year, and its newly added capacity this year is already insufficient to meet the order growth demands of all clients. The company has decided to uniformly raise processing fees for all LFP product series by 2,000 yuan/mt, effective August 1, 2026.

Data shows that the average monthly price of LFP in June 2026 was 61,113.33 yuan/mt, up 19.34% from its 51,209.52 yuan/mt average at the beginning of the year, and over 80% higher than the 33,802.08 yuan/mt recorded in the same period last year.

In terms of downstream demand, lithium battery shipments have maintained a high-growth trajectory, underpinning the high operating rates of LFP enterprises. Some institutions forecast that total lithium battery shipments will grow by approximately 45% in 2026, with the total volume expected to reach 3 TWh in 2027—an acceleration of growth compared to earlier projections. Industry expansion is jointly supported by the power battery and ESS battery sectors.

Among these, the ESS sector exhibits particularly strong growth elasticity. ESS battery shipments in 2026 are expected to rise by over 60% YoY, with full-year volume approaching 1 TWh and its share of total lithium battery shipments surpassing 38%. This share is expected to further increase to over 40% in 2027 and could approach 50% in 2028.

SMM New Energy Research Team

Wang Cong 021-51666838

Feng Disheng 021-51666714

Yang Zhaoxing 021-20707860

Wang Zihan 021-51666914

Wang Jie 021-51595902

Chen Bolin 021-51666836

Wang Yizhou 021-51595909

Xu Mengqi 021-20707868

Hu Xuejie 021-20707858

Lin Ziya 021-51666902

Yang Le 021-51595898

Li Yisha 021-51666730

Wang Zhaoyu 021-51666827

Xiao Wenhao 021-51666872

Zhang Jing 021-51666878