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February 20, 2023
Supply and demand of lithium iron phosphate are tightening
As the two main directions of power batteries, lithium iron phosphate batteries and ternary lithium batteries have been ups and downs and compete with each other over the years.
Starting in 2016, the cruising range has become the focus of attention and research of various electric vehicle manufacturers. For a time, the ternary lithium battery with high energy density and strong battery life has become a sweet bun in everyone's eyes. The influx of capital and strong policy support have made many newly-added lithium iron phosphate projects either idle or suspended, falling into a period of overcapacity that lasted for several years.
However, starting in February this year, the price of lithium iron phosphate, the cathode material of lithium iron phosphate batteries, started a wave of bottoming out. According to the data monitored by the business agency, throughout February, the average price of domestic power-type premium lithium iron phosphate rose from 37,000 yuan/ton in January to 41,000 yuan/ton. As of yesterday, the price has risen to 43,000 yuan/ton.
Judging from the information learned from multiple sources, the price increase of lithium iron phosphate comes from the transmission of the price increase of the upstream raw material lithium carbonate that started at the end of last year on the one hand (with a certain lag); on the other hand, it comes from the downstream power battery. Plants and automakers have regained their awareness of the safety and low cost of lithium iron phosphate batteries, which has brought about a significant increase in product demand.
It is understood that not only Tesla Model 3, BYD Han and Shenzhou Wuling Hongguang mini and other top-selling models in the market are beginning to use lithium iron phosphate batteries, some traditional car companies, such as Changan, Dongfeng, SAIC, etc., also have models. Started to carry lithium iron phosphate batteries.
Tesla CEO Musk also posted on Twitter not long ago that he would increase the use of lithium iron phosphate batteries because of concerns about nickel production capacity.
In fact, in addition to the advantages in cost and safety, power battery manufacturers have continued to change in research and development technologies in recent years, such as the CTP technology of the Ningde era and BYD's blade battery technology, which also caused the problem of short mileage for lithium iron phosphate batteries. , Has been resolved to a certain extent, and has enhanced its competitiveness in the market.
In addition, many practitioners and industry analysts have reported that many car manufacturers and battery factories have now discovered that the core of the development of electric vehicles may not be the cruising range, but the convenience of charging. If charging can be as convenient as refueling on a certain day, the cruising range is not so important.
The focus has shifted from battery life to charging. At this time, how to reduce costs and increase efficiency so that more people can afford it has become a more concern for battery manufacturers and car manufacturers. Cheap and durable lithium iron phosphate highlights its value. Research data from third-party institutions shows that since last year, the growth rate of demand for lithium iron phosphate has surpassed that of ternary lithium batteries, and the market share has gradually increased.
Earlier, a report issued by the Federation of Transportation Associations mentioned that the demand for ternary lithium batteries in the market has dropped from the highest 76% in the first quarter of last year to 48% in December, while lithium iron phosphate in the same time period The proportion of demand increased from 23% to 41%.
In fact, in addition to the new energy vehicle market, the two-wheeled vehicle market and the energy storage market, which have been more popular in the past two years, have also provided a significant increase in the demand for lithium iron phosphate.
Some head lithium iron phosphate practitioners said that the large-scale outbreak of demand in a short period of time has caught the company by surprise. The orders in recent months have been full, and the machine has been overloaded. In fact, there were some media reports in February this year that many mainstream lithium iron phosphate plants have suspended quotations and stopped placing external orders.
"Such a situation of tight supply and demand may continue for some time." Some practitioners said that many lithium iron phosphate plants have actually done expansion projects, but the new capacity has not been released so quickly, and it may take several months.
According to the data, in fact, the output of lithium iron phosphate in January this year has increased by 342.7% compared with last year, reaching 20,630 tons, which is the highest value in history, but still cannot meet downstream demand. The actual shipments of some leading companies, such as Defang Nano and Bitterui, are larger than the production, and the inventory has dropped significantly.
The booming market demand for lithium iron phosphate has also attracted the cross-industry participation of some chemical companies. In February of this year, China Nuclear Titanium Dioxide announced that it would invest 12.1 billion yuan in the name of its subsidiary Oriental Titanium to build a project with an annual output of 500,000 tons of lithium iron phosphate. However, this operation of the company attracted the attention of the exchange and was asked to explain the rationality of cross-border projects.