Recently, while facing continuous downward pressure on prices, the lithium iron phosphate industry has continued to receive good news, with long-term contract orders worth billions of yuan continuously emerging. This not only highlights the strong resilience of market demand, but also reveals the positive trend of leading enterprises in the industry seeking breakthroughs through technological upgrades and international layouts.

Among them, Ningde Times' layout in promoting the iteration of high-voltage solid density lithium iron phosphate products is particularly noteworthy.

According to the announcement on May 19th, Wanrun New Energy will cooperate with CATL to supply approximately 1.3231 million tons of lithium iron phosphate products to CATL between May 2025 and 2030. Based on current prices, the total transaction amount is estimated to exceed 40 billion yuan.

Ningde Times promises to purchase no less than 80% of the promised amount per month, and both parties will jointly promote the iteration and mass production of high-pressure solid density lithium iron phosphate products. High voltage compaction technology is considered a key direction for improving the energy density and product value of lithium iron phosphate.

Longpan Technology, with its advanced layout of overseas lithium iron phosphate production capacity, has successively won international large orders.

In early June, Longpan Technology Holdings' Lithium Source Asia Pacific signed an agreement with EVE Energy Malaysia, agreeing to sell a total of 152000 tons of lithium iron phosphate to the latter between 2026 and 2030, with a total contract amount exceeding RMB 5 billion.

Previously, Lithium Source (Asia Pacific) signed a five-year supply agreement for lithium iron phosphate with Ford's battery joint venture Blue Oval Battery Park, Michigan in January 2025.

In addition, Changzhou Lithium Source also revised its supply agreement with South Korean LG New Energy at the end of last year, and will supply 260000 tons of lithium iron phosphate cathode materials.

In the domestic market, Longpan Technology has also performed well. In May, its controlling subsidiaries Changzhou Lithium Source and Nanjing Lithium Source reached an agreement with Chu Neng New Energy to sell 150000 tons of lithium iron phosphate to the latter between 2025 and 2029, with an estimated total sales amount exceeding 5 billion yuan.

To support its global business expansion, Longpan Technology Group increased its capital by RMB 369.7 million to Changzhou Lithium Source on May 30th, mainly to support the development of the second phase of the Indonesian factory and the new manganese iron lithium phosphate production line of the Xiangyang factory in Hubei.

Longpan Technology's Indonesian project is the first overseas production base for China's lithium iron phosphate industry, and its scarcity is bringing potential value enhancement to the enterprise.

Another positive electrode material manufacturer, Fengyuan Shares, also announced in April that its wholly-owned subsidiary Fengyuan Lithium Energy has signed a three-year cooperation framework agreement with Huizhou BYD Battery for lithium iron phosphate. BYD promises to prioritize procurement under the same business conditions.

The signing of the above-mentioned large orders collectively reflects the stability of downstream demand.

However, in contrast to the frequent occurrence of orders, the lithium iron phosphate industry is undergoing a severe dual test of price and profit. In 2024, the positive electrode material sector will become the most significant segment in the lithium battery industry chain with a decrease in revenue and profit, mainly due to the sharp decline in the price of lithium salt raw materials.

The price of lithium salt has decreased from about 600000 yuan per ton at the end of 2022 to 100000 yuan at the end of 2023, and further dropped to 77000 yuan by the end of 2024. As a result, the gross profit margin of the lithium iron phosphate industry will continue to decline to around 3% in 2024.

The top iron lithium material enterprise, with full production and cost control below 30000 yuan per ton in 2024, has a gross profit of less than 5000 yuan per ton, and the decline in revenue and gross profit far exceeds the increase in sales volume, indicating that the strategy of exchanging price for quantity is facing enormous pressure.

The downward trend of market prices is still ongoing. In May of this year, under the influence of oversupply and the release of low-cost lithium mining capacity upstream, the price of lithium carbonate has fallen below 60000 yuan per ton. Market predictions suggest that lithium prices may further drop to 50000 yuan per ton within the year.

Transmission to the lithium iron phosphate market, as of the end of May, the average market prices of power type and energy storage type lithium iron phosphate have dropped to 32000 yuan and 31000 yuan per ton respectively, a decrease from the previous month and a decrease of about 1000 to 1500 yuan/ton from the beginning of the year.

In this context, the iron lithium industry urgently needs structural transformation. High pressure lithium iron phosphate is considered an important way to enhance product value due to its performance advantages.

It is reported that high-pressure lithium iron phosphate products with a capacity of 2.6g/cm 3 or more can achieve a premium of about 2000 yuan per ton. However, the current industry has relatively concentrated and scarce production capacity of this type, and the pace of expansion is cautious.
However, the demand for lithium iron phosphate in overseas markets is accelerating, which will also bring new growth points to the industry.

Recently, two major battery manufacturers in South Korea, LG Energy and Samsung SDI, have both planned to introduce lithium iron phosphate battery production lines at their joint owned US factory with General Motors, sending a signal.

General Motors plans to deploy lithium iron phosphate batteries in 5 out of its 7 electric vehicle models, including flagship models such as the Chevrolet Bolt, Equinox, Blazer, and Silverado EV. LG New Energy and General Motors' joint venture factory in Tennessee will shift some of its production capacity to LFP battery production.

Samsung SDI has agreed with General Motors to introduce a lithium iron phosphate battery production line for electric vehicles at a joint venture plant in Indiana in 2027.

In summary, although the lithium iron phosphate industry is facing challenges of price decline and narrowing profit margins in the short term, the frequent occurrence of large orders, especially those from overseas markets and high value-added products such as high-pressure materials, reflects a solid foundation of demand and a clear direction for industrial upgrading.

The industry generally believes that the supply of high-quality production capacity is still in short supply, while low-end production capacity is facing clearance pressure. In the future, the successful expansion of overseas markets and breakthroughs in high-pressure technology will be the key to leading the lithium iron phosphate industry out of its current predicament and achieving value reshaping.