According to the data survey of the Institute of lithium battery research (GGII) of high industry and Research Institute,In 2020, the shipments of lithium iron phosphate cathode materials in China increased significantly, with 124000 tons shipped, a year-on-year increase of 41%, and the market size was about 4.5 billion yuan.

Shipments of lithium iron phosphate materials in China from 2018 to 2020 (10000 tons)

Data source: Institute of lithium battery research (GGII), January 2021

Output value of lithium iron phosphate materials in China from 2018 to 2020 (10000 tons)

Data source: Institute of lithium battery research (GGII), January 2021

The main reasons for the growth of lithium iron phosphate battery market are:

1) In 2020, the market share of lithium iron power batteries in China increased by 8 percentage points year-on-year, mainly driven by the sales of BYD Han, lithium iron model 3 and Hongguang Mini EV;

2) The growth rate of energy storage market exceeded expectations. Driven by the accelerated construction of 5g base stations and the growth of foreign home storage market, the shipment of energy storage lithium batteries in 2020 increased by more than 50% year-on-year;

3) The market of small power (including shared motorcycles and replacement cabinets) is driven by both export and domestic demand. The shipment of lithium batteries increased by more than 80% year-on-year. The proportion of lithium iron phosphate batteries in the domestic small power market is expected to be close to 30%;

4) In addition, the shipments of low-speed vehicles, electric forklifts, heavy trucks, construction machinery, ships and other segments in 2020 increased year-on-year. The above reasons drive the increase in the shipment of lithium iron batteries, which in turn drives the increase in the shipment of lithium iron phosphate materials.

Data source: Institute of lithium battery research (GGII), January 2021

From the price trend of lithium iron phosphate material, the price of lithium iron phosphate material showed a downward trend in 2020, for the following reasons:

1) In the first half of the year, the lithium carbonate market has a large inventory, and the demand of the terminal market for upstream raw materials is less than expected, resulting in a phased oversupply in the lithium carbonate market, driving its price downward;

2) The demand in the terminal market was insufficient in the first half of the year. In order to obtain orders, enterprises adopted the strategy of low price sales to drive down the price of iron lithium materials;

3) The application terminal of iron lithium battery is sensitive to cost and transmitted to the upstream, which makes it difficult for the price of iron lithium materials to rise;

4) In the fourth quarter, due to the tight supply and demand changes in the industry and the rising price of raw materials, the price of iron lithium materials rose back, but the range was limited.

Trend of power lithium iron phosphate materials from 2017 to 2020 (10000 yuan / ton)

Data source: sorted out by the Institute of lithium battery research (GGII), January 2021

From the perspective of market competition pattern, the concentration of leading enterprises in the iron lithium material market decreased in 2020, and the market share of a number of enterprises previously in the second and third tier echelons began to rise.It is mainly due to the rapid rise of downstream application markets such as small power and energy storage, which leads to the rapid growth of shipments of second and third tier enterprises that traditionally do not rely on large power markets, driven by the demand of other market segments. In addition, due to the fact that the growth rate of new energy vehicles is not as fast as that of small power vehicles and energy storage and other application fields in the big power market, the market share of leading enterprises dominated by the big power market has declined.

The iron lithium material market in 2020 shows the following characteristics: 1) the market concentration of leading enterprises decreases; 2) The total market concentration of second tier enterprises has increased, and the market balance has improved; 3) The leading enterprise is no longer a dominant one.

The reasons for the above characteristics are as follows: 1) power battery enterprises have many suppliers to choose from, and they are mostly cost and performance-oriented, which makes it difficult for material enterprises to form a strong leader; 2) Market segments (small power, energy storage, etc.) are highly sensitive to material costs, with different levels of material selectivity, and suppliers also have diversity of choices; 3) After years of development, the lithium iron phosphate material industry has generally shown the characteristics of oversupply of production capacity, a large number of enterprises and insufficient high-end production capacity. High quality products will be given priority to large manufacturers of head batteries.

Quarterly average price of negative electrode materials in China from 2019 to 2020 (unit: 10000 yuan / ton)

Data source: Institute of lithium battery research (GGII), January 2021

It is estimated that the lithium iron phosphate material market in 2021 will have the following characteristics:

1) Driven by the shortage of upstream raw materials and the strong demand in the end market, the price of lithium iron phosphate material is expected to rise by 2% to 10%;

2) The core iron lithium material factory will increase the self production of iron sources for its own industrial chain integration and cost reduction, and the production process of iron sources is expected to usher in a new round of changes;

3) Domestic lithium iron phosphate battery shipments are expected to exceed 90gwh in 2021;

4) The capacity utilization rate of leading enterprises will remain high;

5) The production of lithium iron phosphate materials will be more characterized by "bulk chemicals". The technical threshold of lithium iron materials in the lithium iron battery market will be reduced, the market scale will be expanded, the application scenarios will be more abundant, the product models will be gradually unified, and the enterprise productivity and production scale will be further improved;

6) As the demand for channel construction increases, the platform and brand influence will become the complementary points of enterprises: energy storage, small power, ships and other fields have obvious regional characteristics, and the enterprises providing such batteries also have problems such as low concentration, large fluctuations in the number of enterprises, and imperfect procurement channels. How to realize platform sales and create word-of-mouth effect for lithium iron phosphate material enterprises will become an important task in their sales and marketing links;

7) It is expected to be the first choice to build factories in other places, near major customers, near raw materials and low energy consumption areas.

Launched by the lithium battery research institute of advanced industry and Research (GGII)Research and analysis report on China's lithium iron phosphate battery industry in 2021It is the presentation of the results of GGII's field visits, research and analysis over the years. The report makes a comprehensive comb and in-depth analysis of China's lithium iron phosphate battery market and upstream and downstream industrial chains, and has a large number of first-hand industry data. In addition to the first-hand research information and data, authoritative data sources such as the National Bureau of statistics, the Ministry of industry and information technology, automobile insurance licensing data, high tech lithium battery database, public reports of listed companies (prospectus, transfer prospectus, annual edition, semi annual report, inquiry report, etc.), enterprise public speech materials or reports also constitute the data sources of this report.

Data range description

● the data in this report will be updated to December 2020;

● the data in this report is mainly from Chinese Mainland, with a small amount of data from other regions in the world

● part of the data in this report comes from field research and telephone research, which may be different from the actual data of the enterprise.

● lithium batteries mentioned in this report refer to secondary lithium-ion batteries. The output value of lithium batteries in Chinese Mainland, Hong Kong, Macao and Taiwan does not include foreign-funded enterprises (including Japanese funded enterprises ATL), unless otherwise specified. Article source:High tech lithium power grid