According to data from Baichuan Information, on December 30, lithium iron phosphate manufacturers collectively increased their prices by 1,000 yuan per ton, which is nearly 3%, and the market is in short supply. In this regard, Founder Securities believes that the current demand for lithium iron phosphate has entered a period of high growth, and the industry has accelerated integration. The application of lithium iron phosphate in passenger cars has rebounded, and the demand in various fields has gradually increased. It is expected that the industry will enter a high growth period in 2021, and the annual demand is expected to exceed 190,000 tons.
The high safety of lithium iron phosphate has helped its recovery in the passenger car field. Whether it is the CTP battery management control technology of the Ningde era or BYD's "blade battery", the lithium iron phosphate battery has begun to experience its second spring.
In the battery field, there are mainly two technical routes of lithium iron phosphate and ternary lithium. The ternary lithium battery is named "Ternary" because of the nickel-cobalt-aluminum (NCA) or nickel-cobalt-manganese (NCM) in the cathode material. It is characterized by high energy density and high cost, while lithium iron phosphate is the opposite. According to the country's early subsidy policy for new energy vehicles, the higher the battery life, the higher the subsidy, which has also led many car companies and power battery companies to develop ternary lithium batteries.
In terms of absolute prices, the price of lithium iron phosphate materials has also experienced a decline since 2017. With the inclination of policies, cost-effective small electric vehicles began to be favored, and with the development of technology, in terms of policy subsidies, lithium iron phosphate batteries can also reach the "pass line." According to the subsidy policy in 2019, the vehicle's cruising range is at least 250km and the energy density of the battery system is not less than 125Wh/kg. The energy density of lithium iron phosphate battery cells from battery manufacturers such as BYD and Guoxuan High-Tech can exceed 190Wh/kg. With the rise in the upstream lithium carbonate price and the recovery in downstream demand, the price of lithium iron phosphate materials ushered in an increase. The price rose from 34,000 yuan/ton in early November to 36,500 yuan/ton on December 23. From the perspective of industry demand, according to Xinlu Information, the output of lithium iron phosphate materials from January to September 2020 reached 87,600 tons, a year-on-year increase of 22.6%. Corresponding to this is its expected growth rate of ternary materials production in 2020 is 7%, which is significantly lower than the growth rate of lithium iron phosphate materials. In this regard, Caixin Securities said that with the growth of energy storage demand for iron batteries and the recovery of lithium iron phosphate batteries in the field of new energy vehicles, in 2021, the lithium iron phosphate industry chain is expected to usher in both volume and price increases.
