[SMM analysis] the output of lithium iron phosphate decreased by 2.9% in February, and the market concentration decreased slightly.

SMM4 March 3: according to data, China produced 21320 tons of lithium iron phosphate cathode materials in February 2020, down 2.9 percent from 21960 tons last month. An increase of 412.50% over the same period last year. In February, the overall market of lithium iron phosphate is still hot, the overall demand remains high, and most manufacturers' orders have been arranged after the Spring Festival, so there is no holiday to maintain full production during the Spring Festival. However, a small number of manufacturers have a small number of holidays or equipment overhaul, and the number of production days in February is shorter, so it is down slightly from 21960 tons in January.

Data source: SMM

Reviewing the historical data, since June last year, the output of lithium iron phosphate in China has experienced a continuous growth of nearly half a year, and even maintained a high month-on-month growth rate of nearly 12% from July to October. As of February 2021, the output of lithium iron phosphate cathode materials in China has increased by 187% compared with that in June last year, almost doubling. At the same time, in February 2020, its output increased even more obviously than the same period last year, reaching 412.5%, mainly due to the slowdown of China's overall economic activity, weak production and marketing, and a low base when the novel coronavirus epidemic was raging in February last year.

However, it is worth noting that, from the data point of view, the head of lithium iron phosphate material enterprise share showed a gradual decline trend. On the one hand, due to the recent hot demand for lithium iron phosphate downstream, its market share in power batteries and small power has gradually increased, and the current production capacity of large head factories alone has been unable to fully meet the downstream demand. Some downstream battery enterprises have to be downwards compatible outside the first-line iron-lithium enterprises, bringing a number of second-and third-line echelon iron-lithium manufacturers into the supply chain and restarting idle production lines, resulting in the overall upstream of market shipments. Dilute the share of the head enterprise. On the other hand, the demand for downstream overseas household energy storage devices, Electroweb and 5G base stations has also broken out in recent years, and some manufacturers that specialize in energy storage iron lithium also have rising shipments, driving up the overall output of the market.

On the whole, the current iron and lithium market demand is strong, and the lack of production capacity still exists. Although some manufacturers are still actively expanding production, taking into account their construction cycle, and debugging still takes time, so this situation of supply falling short of demand is expected to remain. After the Spring Festival, production will also pick up in March.