Lithium iron phosphate manufacturers, Raise Prices!

On January 6, two listed lithium iron phosphate companies confirmed to the Shanghai Securities News that they had raised prices for downstream customers. One company declined to disclose the extent of the price increase, while a representative from the other company stated that the increase for major customers was between 1,500 and 2,000 yuan per ton.

The aforementioned person in charge told the Shanghai Securities News that the successful price increase was mainly due to the tight supply of lithium iron phosphate. "What's scarce will be the first to rise in price." Among lithium battery materials, the obvious scarcity of lithium hexafluorophosphate led to its price increase first, and the same logic applies to lithium carbonate. The tight supply of lithium iron phosphate is mainly due to strong demand for energy storage, coupled with better-than-expected sales of new energy vehicles.

The person in charge also revealed a strong signal of production in January: "January is traditionally the off-season for the industry, but the industry's production in January 2026 is only 10% lower than in December 2025, while in previous years it was 40% lower."

A key point of contention in price negotiations is how the price of lithium carbonate should be passed on to battery manufacturers.

Xinluo Lithium Battery stated that regarding the settlement reference for lithium carbonate, suppliers currently offer customers two options: one is that the customer provides all the lithium carbonate; the other is that customers who cannot provide all the lithium carbonate will resolutely not refer to the website's price quotes, but will follow the futures market.

The aforementioned person in charge explained to reporters that the average spot price of lithium carbonate on the Shanghai Metals Market (SMM) is significantly lower than the futures price. Currently, when lithium iron phosphate (LFP) companies purchase lithium carbonate, apart from long-term contracts, they need to negotiate a price with futures traders if they purchase spot goods. This negotiation involves choosing a futures price at a specific point in time as the settlement price based on their expectations of futures price trends. However, when selling to downstream customers, customers demand settlement based on the SMM spot price. This results in LFP companies bearing a significant price difference. Therefore, companies require downstream settlements to be based on futures prices.

Recently, lithium carbonate futures prices have not only continued to rise, but have also experienced occasional sharp increases or significant decreases. As a raw material for the industry, the significant fluctuations in futures prices pose a risk to the operations of lithium iron phosphate (LFP) companies, especially in their pricing decisions.

The aforementioned person in charge stated that LFP companies prioritize battery manufacturers as their lithium carbonate suppliers, but in reality, the supply ratio varies among companies. The lithium price transmission mechanism is still under discussion with customers, and they hope to negotiate a reasonable lithium price transmission mechanism.