As destocking gradually comes to an end, the prosperity of the lithium iron phosphate industry is expected to further improve. Guotai Junan said that lithium battery is a sector whose fundamentals have actually improved driven by policies. The demand for short-term auto market plus energy storage has exceeded expectations. The mid- to long-term European carbon emissions bill and the rush to install energy storage in the United States have pushed up demand expectations for next year. The industry's demand for high-end lithium iron phosphate has increased significantly, and the industry has been in a situation where supply exceeds demand, and there are expectations for price increases.
There have been significantly more orders involving lithium iron phosphate since the beginning of this year. In August this year, Fulin Precision announced that its subsidiary Jiangxi Shenghua signed an agreement with CATL. CATL paid an advance payment to Jiangxi Shenghua to support the construction of the company's lithium iron phosphate material project with an annual output of 75,000 tons. CATL promises to purchase at least 140,000 tons of lithium iron phosphate from Jiangxi Shenghua every year from 2025 to 2027, provided that the product has comprehensive advantages.
The demand for lithium iron phosphate batteries in overseas markets, especially in Europe and the United States, is extremely strong. European auto giant Stratis said lithium iron phosphate batteries are more cost-competitive and can produce more affordable vehicles for the middle class. The battery also features long life and high thermal stability, helping to provide customers with high-quality and durable electric vehicles. According to estimates by industry organizations, the total demand for power and energy storage batteries in Europe will reach 1,500GWh by 2030, of which about half, or 750GWh, of batteries will use the lithium iron phosphate route.
In July this year, French automaker Renault signed a purchase order for 39GWh of lithium iron phosphate batteries, which will be used to support approximately 600,000 of its electric vehicles. It is reported that Ampere, Renault's electric vehicle business unit, will cooperate with LG New Energy and CATL to establish a lithium iron phosphate battery supply chain in Europe.
In terms of equipment, in March this year, Leading Intelligence stated that it had signed a global strategic cooperation agreement with American battery manufacturer ABF and would provide ABF with lithium battery smart production line services with a total scale of 20GWh. It is reported that this was the largest order for lithium battery equipment obtained by a Chinese company in the United States at that time. ABF is an American battery manufacturer specializing in lithium iron phosphate battery manufacturing. Its first-phase production line in Tucson, Arizona is expected to be put into production in 2025.
It is worth noting that at the beginning of this year, Samsung SDI stated that it would consider using equipment provided by Chinese suppliers in its lithium iron phosphate battery production line. Sources revealed that Samsung SDI explained its plans for its lithium iron phosphate battery production project to potential suppliers in its closed-door meeting. Samsung SDI is expected to place an order for equipment this year and begin installation next year. Its lithium iron phosphate battery production line is likely to be built at the Ulsan factory.
Capacity expansion
Industry organizations predict that by 2030, the global demand for power batteries will exceed 3,500 GWh, and the demand for energy storage batteries will reach 1,200 GWh. In the field of power batteries, lithium iron phosphate batteries are expected to occupy 45% of the market share, with demand exceeding 1,500GWh. In the field of energy storage, the market share of lithium iron phosphate batteries will exceed 85%, and the demand will exceed 1,000GWh.
Faced with strong market demand, battery and material manufacturers have stepped up the production of lithium iron phosphate. In July this year, the ACT battery project of EVE's US joint venture started construction in Mississippi. The project's planned annual production capacity is approximately 21GWh square lithium iron phosphate batteries, and shipments are expected to begin in 2026; Envision Power's battery factory in Spain Construction has started and it will become Europe's first lithium iron phosphate battery factory when it is put into operation in 2026.
In March this year, there were reports that CATL was negotiating a technology licensing model with General Motors and planned to jointly build a lithium iron phosphate power battery factory in North America. The planned annual production capacity of the factory is no less than that of the factory jointly built by CATL and Ford Motor, that is, the production capacity will exceed 35GWh.
Source：https://news.bjx.com.cn/html/20241029/1407623.shtml
