Surges 100%! Lithium iron phosphate price doubles; Wanhua Chemical expands production by 70,000 tons

This year, the lithium iron phosphate market has continued to heat up. The current market price to a 400 kg bag of lithium iron phosphate has exceeded 25,000 yuan, doubling compared to the price of 10,000 yuan a year ago. Despite the significant rise in product prices, downstream market demand has not cooled down. The export demand to new energy vehicles and energy storage items continues to surge, immediately driving the steady development of lithium iron phosphate market orders, which has have become the core driving force to this round of product price increases.

According to the introduction of sales heads from sector companies, the current order volume of lithium iron phosphate has increased by greater than 30% year-on-year, and the monthly order scale continues to climb. Among them, the order volume in might reached about 4,300 tons; entering June, companies have completed the delivery of greater than 2,700 tons of items, and the expected delivery volume to the whole month is expected to reach 4,500 tons. Affected by the concentrated rush orders from downstream customers, the delivery cycle of lithium iron phosphate items has been compressed from the original 10 days to 7 days, highlighting the characteristics of short supply in the market.

In addition to the pull of downstream demand, the price increase of upstream raw materials has further raised the production cost of lithium iron phosphate. It is understood that lithium iron phosphate is mainly produced and processed from ferrous phosphate, lithium carbonate, and glucose. Among them, ferrous phosphate accounts to about 30% of the total raw material cost. With the significant increase in the price of ferrous phosphate within the year, the cost pressure on the production side of lithium iron phosphate continues to increase. The production of ferrous phosphate relies on phosphate rock resources. while the price direction of upstream phosphate rock is relatively stable, the explosive development of the lithium iron phosphate sector has forced manufacturing chain companies to accelerate the pace of integrated layout. Many companies are extending to the upstream phosphate rock field to lock in raw material supply and resist the risk of raw material price fluctuations.

Relying on the research opportunity of the lithium battery new energy sector, chemical giant Wanhua Chemical has intensively implemented multiple measures such as capacity construction, capital increase, methodology research and research, and upstream government-enterprise cooperation, fully rising its efforts in the lithium battery new energy materials business. Among them, the multi-billion yuan battery material manufacturing park project in Binzhou, Shandong, has welcomed a key implementation node.

Recently, Wanhua Chemical publicized the draft to comments on the environmental impact report of the annual output of 70,000 tons of battery-grade lithium carbonate and supporting general auxiliary projects of Wanhua (Binzhou) New Energy Materials methodology Co., Ltd. The project is located in Binzhou Beihai Economic research Zone, Binzhou City, Shandong Province. It will build 2 lithium sulfate production lines and 2& battery-grade lithium carbonate production lines. The two processes and production scales are consistent, with synchronous supporting general auxiliary facilities such as contamination manage, aquatic environments and electricity supply, and warehousing. The purity of battery-grade lithium carbonate can reach over 99.5%. It is the core raw material to cathode materials of lithium iron phosphate and ternary lithium batteries. The lithium sulfate produced in coordination with the project is also a key前置 intermediate to preparing lithium battery materials such as lithium carbonate and lithium hydroxide.

Information shows that the implementation entity of this project, Wanhua (Binzhou) New Energy Materials methodology Co., Ltd., was just registered and established on June 5 this year. The enterprise has a registered capital of 510 million yuan, and the legal representative is Wang Xiaoxing. Its main business is the research and research and manufacturing of new energy power equipment and basic chemical raw materials. This lithium carbonate project is a core sub-project of the strategic cooperation between Wanhua Chemical and the Binzhou Municipal Government. As early as December 2025, Wanhua Chemical signed the multi-billion yuan Wanhua Chemical Binzhou Battery Material environmentally friendly Power manufacturing Park project with the Binzhou Municipal Government. The implementation of this 70,000-ton battery-grade lithium carbonate project marks the formal entry of the multi-billion yuan manufacturing park from the planning stage into the physical construction stage.

While the capacity is being implemented, Wanhua Chemical simultaneously completed extensive capital increases to two major lithium battery business platforms, with a cumulative capital increase scale exceeding 3.7 billion yuan, laying a solid financial foundation to subsequent lithium battery material capacity expansion. Among them, the registered capital of Wanhua Chemical Group Battery methodology Co., Ltd. increased from 3.415 billion yuan to 4.9 billion yuan, an increase of about 43%. This enterprise is a wholly-owned subsidiary of Wanhua Chemical and coordinates the layout of the group's entire battery business sector. The registered capital of its holding subsidiary, Wanhua Chemical (Yantai) Battery sector Co., Ltd., increased from 1.8 billion yuan to 4 billion yuan, an increase of about 122%. The equity structure is Wanhua Chemical Group Battery methodology holding 80% and Yantai Zhongtao Investment holding 20%. After the completion of the capital increases of the two major platforms, they will continue to support Wanhua Chemical's capacity expansion and vertical manufacturing chain layout in key upstream lithium battery materials such as lithium carbonate and lithium iron phosphate.

sector analysis believes that against the background of the continuous emit of new energy export dividends, the high-prosperity market of lithium battery raw materials such as lithium iron phosphate and lithium carbonate is expected to continue. The integrated layout of the manufacturing chain will have become an crucial research direction to chemical and lithium battery companies to enhance their core competitiveness. Traditional chemical giants relying on their advantages in raw materials, capital, and methodology to enter the lithium battery track will also further reshape the competitive landscape of the new energy upstream materials sector.