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In the first quarter, under the downstream over-expected market demand, including lithium iron phosphate materials, prices rebounded slightly. However, with the recent rapid decline in the price of lithium carbonate, the price of lithium iron phosphate materials has also been affected.

According to market data, only in April, the price of lithium carbonate fell close to 10%, of which April 7 suffered the impact of Trump tariff crisis, for lithium carbonate, lithium iron phosphate, including the main material impact is obvious.

However, from the point of view of price fluctuations, since April, the price impact mainly affects the more upstream lithium salt materials, lithium iron phosphate price impact is relatively small, its decline is basically within 5%.

This also shows that, after the price adjustment in the first quarter, lithium iron phosphate manufacturers are still in the mood to support the price. Part of the lithium iron phosphate manufacturers to change the situation of increasing revenue without increasing profits are also eager to maintain stable material prices.

In the final analysis, lithium iron phosphate manufacturers in the maintenance of stable material prices, its main maintenance of stable processing fees. In recent years, lithium iron phosphate manufacturers pricing mechanism to change, anchored in the ‘market price of raw materials + processing fee’ model, the source of its profits mainly lies in the processing fee.

According to GaoGong lithium electric understanding, lithium iron phosphate prices in the first quarter of this year to rise, in addition to lithium carbonate prices, more critical is the downstream manufacturers to relax the lithium iron phosphate processing fee quotes. 2024 to the first quarter of this year, battery, car enterprise profit improvement, but also to the lithium iron phosphate battery manufacturers to provide conditions for the increase in processing fees.

From the product structure point of view, a new generation of high-pressure solid lithium iron phosphate processing fee performance is better, the processing fee of the old generation of lithium iron phosphate material is facing greater price pressure. According to GGI data, the second generation of lithium iron phosphate processing fee offer 14.000 yuan / tonne or so, four generations of lithium iron phosphate processing fee offer 18.000 yuan / tonne or so, the price difference is significant.

This also means that speed up technology iteration, access to higher processing fee profits is becoming an important driving force for lithium iron phosphate manufacturers to change the price predicament.

Hunan Yuneng also said that in 2024. the company's new products CN-5 series, YN-9 series and YN-13 series sales accounted for about 22%, with the changes in downstream demand, is expected to 2025 high-end products accounted for a further increase.

From the point of view of the entire demand market, accelerating capacity iteration and evolving towards the goal of high-end is precisely the key to improving the profitability of lithium enterprises. Ningde era, for example, its quarterly operating income of 84.7 billion yuan, up 6% year-on-year, net profit of 14 billion yuan, up 33% year-on-year. Profit growth rate significantly outperformed the revenue growth rate behind, but also its high-end products unicorn battery, god line battery in the terminal shipments accounted for a substantial increase.

Downstream with the help of high-end to improve profits at the same time, will also be synchronised to conduct the middle and upper reaches of the industry chain, through new materials, access to higher processing fees, thereby improving the profit performance of material manufacturers.

Back to lithium iron phosphate price fluctuations, in the short term, the intensity of competition in the car market in the second quarter has increased, including lithium iron phosphate, including material prices will be under pressure, material manufacturers and downstream battery manufacturers, car companies will face negotiation differences.

However, from the historical price point of view, GaoGong Industrial Research Institute expects the second half of the overall material prices still have room to rise. Especially this year, pure electric models compared to the same period last year, the growth rate increased significantly, for the installed demand to improve significantly. Driven by the impact of high-end and downstream demand growth, lithium iron phosphate manufacturers processing fees are also expected to grow steadily.