Analysis of the industrial chain of lfp cathode industry



Lithium iron phosphate cathode is a lifepo4 battery electrode material, the chemical formula is LiFePO4 cathode (referred to as lfp cathode), which is mainly used in various lithium-ion batteries. The upstream of lfp cathode is mainly raw materials such as lithium source, iron source, and phosphorus source, and the downstream is used to prepare lithium-ion batteries.


The main application fields of lithium-ion batteries can be divided into two categories: power batteries and non-power batteries. Among them, in the field of power batteries, lfp cathode is mainly used as the cathode material of various types of pure electric and plug-in hybrid new energy vehicle power systems. In the field of non-power batteries, lfp cathode is mainly used in energy storage of 5G base stations, energy storage of new energy power generation terminals, and replacement of light-duty power lead-acid markets.

1. Introduction of lfp cathode

Lfp cathode presents an olivine structure, and as the cathode e material of the battery, it is coated on aluminum foil and connected to the cathode of the battery. When the lfp cathode battery is charged, Li+ deintercalates from the cathode and enters the anode through the electrolyte, and at the same time e- moves from the cathode to the anode from the external circuit to ensure the charge balance of the cathode and anode. When discharging, Li+ is deintercalated from the anode and inserted into the cathode through the electrolyte.

The performance of LFP cathode is determined by its elemental composition and crystal structure. The olivine structure of lfp cathode has a polyanion framework, and the structural units are LiO 6 octahedron (lithium at the body center), FeO 6 octahedron (iron at the body center) and PO 4 tetrahedron (phosphorus at the body center). The strong P-O covalent bond in the phosphate radical can stabilize the oxygen atom and prevent it from being oxidized and releasing oxygen when the battery is fully charged.

Introduction of lfp cathode


So this structure makes lfp cathode have high safety and cycle life. At the same time, the lithium ion of lfp cathode only has a one-dimensional diffusion channel. Compared with the two-dimensional lithium ion diffusion channel of layered materials (lithium cobaltate, ternary), the ion conductance is lower, and the electronic conductance is also lower.

2. Upstream industry of lfp cathode

The main raw materials of lfp cathode include lithium source, iron source, phosphorus source, etc. The price of some raw materials needs to be processed upstream through upstream mineral mining, and finally processed into lfp cathode.

Lithium source

Lithium is a metal element with the element symbol Li, and the corresponding simple substance is a silver-white soft metal, which is also the metal with the smallest density. Lithium batteries have the advantages of high open circuit voltage, high specific energy, wide operating temperature range, balanced discharge, and self-discharge electrons. They have long-term demand rigidity and demand prospects in the field of electric vehicle power batteries and energy storage such as lithium rv battery, marine battery, etc.

Due to the most anode potential, lithium is the most active metal among known elements (including radioactive elements). In nature, it mainly exists in the form of spodumene, lepidolite and phosphate aluminite.

As far as the current situation of lithium extraction from salt lakes in China is concerned, the scale is still small and the utilization rate is insufficient. As far as the overall demand structure of lithium resources is concerned, because of its excellent energy storage properties, it is widely used in batteries and is currently the most widely used battery.

Upstream industry of lfp cathode


According to the data, since 2021, benefiting from the surge in the production and sales of electric vehicles in China, the demand for lithium resources has increased significantly, and the supply has continued to be tight. As far as the current situation is concerned, there is still a big gap between China's electric vehicle penetration rate and 50% penetration rate, which will promote the continuous growth of lithium resource demand.

Iron source

The iron source of lfp cathode is mainly divided into iron element (iron block), ferrous iron compound (ferrous oxalate, ferrous sulfate) and ferric compound (iron oxide).

Phosphorus source

The liquid phase method mostly uses monoammonium phosphate as raw material. Solid-phase methods typically use iron phosphate, indirectly derived from phosphoric acid or monoammonium phosphate. Phosphorus chemical industry is an industry that uses phosphate rock as raw material to produce various phosphorus-containing products through physical and chemical processing.

3. Midstream industry of lfp cathode

Market scale

Due to policy factors, the market size of China's lfp cathode industry has been in a downward trend from 2017 to 2019, falling to 3.969 billion RMB in 2019. With the sharp decline in electric vehicle subsidies in 2020, the market size of the lfp cathode industry will rise rapidly, reaching 34.693 billion RMB by 2021.

Market size of China's lfp cathode industry from 2017 to 2021


Supply scale

After 2019, various battery companies have successively launched battery structure optimization solutions, such as CATL launched CTP batteries, BYD launched blade batteries, and GOTION HIGH-TECH launched JTM batteries. By optimizing the module structure, the effect of increasing energy density can be achieved. In this context, more cost-effective lithium iron phosphate batteries have returned to the public eye.

From the second half of 2020, explosive models such as BYD Han, Hongguang MiniEV, and iron-lithium version Model 3 will be launched one after another, driving the penetration rate of lithium iron phosphate batteries in electric passenger vehicles to continue to increase. In 2021, the output of China's lithium iron phosphate industry has reached 421,800 tons.

Demand scale

From 2017 to 2019, China's national supplements will focus on the assessment of battery energy density. Since 2017, China has incorporated the energy density of battery systems into the assessment criteria for the first time. High energy density and long cruising range have become important assessment indicators for new energy vehicle companies to obtain subsidies.

Power battery companies have turned to vigorously develop ternary lithium batteries, and the market share of lfp cathode has dropped sharply. From 2019 to now, China's national subsidies have declined sharply, battery companies have successively launched battery structure optimization plans, and explosive models equipped with iron-lithium batteries have been launched one after another. In 2021, the demand for lfp cathode industry has reached 402,000 tons.

Analysis of supply and demand balance

After 2019, affected by the reduction of China's state subsidies and technological progress, as China's industrial policy continues to increase policy support for the development of electric vehicles and driven by market demand, terminal demand continues to grow.

A large amount of capital has poured into the lithium iron phosphate industry, and the production capacity has expanded rapidly. The investment scale of low-end cathode materials has exceeded market demand, and there has been a structural overcapacity situation of low-end overcapacity and tight high-end production capacity.

Production and sales ratio trend of China's lfp cathode industry from 2017 to 2021


As terminal application scenarios have higher and higher requirements for material safety and energy density, the lfp cathode industry has experienced structural overcapacity. The production-to-sales ratio will drop to 95.31% in 2021, and China's lfp cathode industry will maintain a balance between supply and demand.

Market competition

At present, small and medium-sized enterprises lacking core competitiveness in China are gradually withdrawing from the market, while some of top 10 lithium iron phosphate materials companies occupy a major market share by virtue of the core preparation technology of precursors. The market competition is intensified and the concentration is rising.

4. Downstream industry of lfp cathode

The main downstream of lfp cathode is mainly the lifepo4 battery industry. At present, lithium iron phosphate battery belongs to the key development industry in China. Due to the relatively mature process, cost control ability, and customer channels, the sales of lithium iron phosphate battery products mainly depend on the fluctuation of downstream market demand.

lifepo4 battery


If there are market fluctuations in the main application fields of lithium iron phosphate batteries, it will have a certain impact on the industry. From the current point of view, China is one of the world's largest producers of lithium iron phosphate batteries, and the downstream industry has a large demand. From the perspective of cost control and national strategy, China has an urgent demand for lfp cathode, so the sales of lfp cathode mainly depend on the downstream demand.

From the perspective of application, lithium iron phosphate batteries currently have a high penetration rate in the fields of electric commercial vehicles and energy storage batteries. In the field of electric passenger vehicles, the penetration rate in China is about 35%.

Some overseas car manufacturers such as Volkswagen and Daimler have started bidding for lithium iron phosphate models. The Chinese lithium iron phosphate version of Model 3 has been partially exported to Europe. It is expected that the penetration rate of lithium iron phosphate vehicles in Europe will gradually increase in the future.

The main application fields of lithium iron phosphate battery


In the field of non-power batteries, lfp cathode mainly involves applications in three directions: 5G base station energy storage, new energy power generation end energy storage, and lead-acid market replacement. From the perspective of market size, lfp cathode will also show explosive growth in the field of non-power batteries in 2021, with a market size of 14.481 billion RMB, a year-on-year increase of 298.68%.


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