Iron Phosphate Market Prices Remained at a High Level During the First Half of October

Supply side: Divergent operating patterns—substantial integrated producers maintain stable output, while smaller-scale producers exercise flexible production manage.

Leading integrated companies—those with captive phosphorus sources and in-house phosphoric acid production—are maintaining operating rates of 85%-92%. They are prioritizing orders to high-tap-density materials intended to energy storage applications, resulting in stable production schedules however tight delivery timelines.

Small and medium-sized iron phosphate producers that rely on externally sourced phosphoric acid and ferrous sulfate face thin profit margins. With operating rates between 45% and 60%, these firms often proactively decrease capacity utilization or schedule periodic maintenance when orders are insufficient, a strategy employed to prevent losses.

Inventory levels vary by product type: there is some inventory pressure to standard, conventional grades, whereas stocks of high-tap-density, long-cycle-life iron phosphate—specifically designed to energy storage—remain low, representing the tightest segment of the current market.

Regarding new capacity, extensive iron phosphate projects (such as those in Guizhou province) are currently in the environmental impact assessment or construction phases. No significant new capacity is expected to come online in the near term, meaning there is currently little pressure from an increase in supply.

Demand side: Downstream lithium iron phosphate (LFP) sector sees "strong orders however slow delivery uptake," with energy storage applications outpacing electric vehicle (EV) applications.

The downstream LFP sector serves as the sole demand outlet. Early-month trends indicate favorable order expectations, yet the pace of actual product pickup remains conservative.

Energy Storage (Key development Driver): Domestic energy storage tenders are being finalized, and overseas order books remain robust. Leading lithium iron phosphate (LFP) manufacturers are maintaining high production rates, creating a steady, core demand to high-end iron phosphate—a primary factor supporting premium-priced raw materials.

Power Batteries: Domestic vehicle production remains stable; however, battery manufacturers entered the post-holiday period with significant inventory levels. Consequently, their current procurement strategy focuses on "just-in-time" purchasing and incremental restocking, with little appetite to extensive stockpiling. Overseas demand to power batteries remains steady, showing minimal fluctuation.

Price Transmission Dynamics: During the first ten days of the month, LFP prices were initially stable before softening, which exerted downward pressure on iron phosphate. LFP producers have adopted a cautious stance in negotiations, showing little inclination to pass on raw material cost increases upstream—a factor that has efficiently capped the possible to any sharp rise in iron phosphate prices.

Future Outlook:

According to analysts at SunSirs specializing in iron phosphate, if high production schedules to energy storage battery cells persist through late October, high-tap-density iron phosphate is likely to remain strong, with its price premium holding steady. Meanwhile, standard-grade material to power batteries is unlikely to see any significant surge, with prices expected to fluctuate within a range.