【SMM Analysis】LFP Sees a 22% Month-on-Month Increase in April, Driven by Multiple Factors Boosting Market Demand

On the raw material side, lithium carbonate prices fluctuated in April, while iron phosphate prices rose slightly. In April, the discount on lithium carbonate and processing fees in the price formula for lithium iron phosphate (LFP) at battery cell factories remained relatively fixed, with no significant adjustments, making it difficult for LFP costs to be passed down.

On the supply side, in April, the operating rates of leading LFP companies increased significantly, and orders from second- and third-tier LFP cathode material companies also increased as they actively explored new customers. Overall, LFP supply increased significantly in April.

On the demand side, as the price war among new energy vehicles continued in April, new models were launched, and trade-in policies provided stimulus, resulting in good performance of orders in the power battery market. Under the pull of multiple factors, downstream battery cell factories increased their production in April, significantly boosting the demand for LFP cathode materials.

In May, it is expected that the energy storage market will be driven by mid-year grid connection demand, leading to an increase in energy storage-type LFP. The demand for power batteries is expected to remain stable. It is predicted that China's LFP production in May will be 182,960 tons, representing a month-on-month increase of 9% and a year-on-year increase of 64%.

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