[SMM Analysis] LFP Market Growth Exceeds Expectations, Top-Tier Enterprises Accelerate Overseas Expansion

Recently, with the recovery of the power battery consumption market and the strong growth in demand in the energy storage sector, the LFP industry has ushered in a new wave of growth. Particularly in Q4, the increase far exceeded expectations, and as year-end approaches, contrary to the usual trend of low production and production reductions, a high operating rate is still maintained.

According to SMM statistics, the overall capacity utilisation rate of LFP in Q4 is approximately 60%, a significant improvement compared to H1 of this year. This change not only confirms the market recovery trend but also reflects the overall growth of the industry, accompanied by ongoing homogeneous competition.

From a technological iteration perspective, the LFP industry is transitioning from the third generation to the fourth generation. In this context, high-end LFP products are in undersupply, with strong market price increase expectations. SMM believes that with continuous technological advancements and market demand upgrades, high-end products will become the new engine for industry development next year, and battery cell manufacturers will innovate to meet market development needs.

Driven by the surge in market demand, many LFP enterprises are showing strong production and sales momentum. Top-tier enterprises can basically achieve full production and sales, maintaining industry prosperity and demonstrating vigorous growth in supply and demand.

The booming demand in the LFP market is attributed to the rapid development of EVs and the energy storage sector. Statistics show that in the first 10 months, the cumulative installed capacity of power batteries in China increased, with a significant rise in the proportion of LFP batteries. The demand for energy storage, both domestically and internationally, remains considerable.

In terms of pricing, with the LFP market long in a state of loss, enterprises generally express a desire to raise prices. As the annual order negotiations and tenders approach, the bargaining between LFP plants and battery cell manufacturers will become more evident.

It is worth noting that with the continuous positive global demand for lithium batteries, top-tier LFP enterprises are accelerating the layout of overseas capacity. According to public information, Lopal's first phase factory in Indonesia has been successfully put into operation, Hunan Yuneng is advancing its LFP project in Spain, and Wanrun New Energy is also planning a project in the US. These initiatives not only help LFP enterprises expand their international markets but also further enhance their competitiveness in the global LFP field.