1. Introduction
Lithium-ion batteries have become an essential part of modern life, powering everything from mobile devices to electric vehicles. Among them, lithium-iron phosphate (LiFePO4) batteries have emerged as a popular choice due to their high safety, long cycle life, and good thermal stability. This article will explore the production process, development status, challenges, and suggestions for the LiFePO4 battery industry.
2. Production Process of LiFePO4 Cathode Material
The production process of LiFePO4 mainly includes solid-phase method and liquid-phase method.
2.1 Solid-Phase Method
The solid-phase method is the most mature and widely used process. It typically involves mixing iron phosphate with lithium carbonate, followed by spray drying, sintering, and pulverization to obtain LiFePO4.
| Advantages | Disadvantages | |
|---|---|---|
| Simple synthesis equipment and process, easy to control reaction conditions, suitable for industrial production | Poor product uniformity and consistency, high energy consumption, possible sintering phenomenon | |
| According to the different precursors, the solid-phase method can be further divided into iron phosphate method, ferrous oxalate method, and iron red method. The iron phosphate method is widely used due to its high compaction density, mature process, low construction cost, and short cycle. | ||
| Iron Phosphate Method Sub-types | Advantages | Disadvantages |
| — | — | — |
| Ammonium method | Lowest cost, by-product ammonium sulfate can be used as fertilizer | More impurities, need to be equipped with sewage treatment device |
| Sodium method | Less impurities than ammonium method | Higher cost than ammonium method, by-product sodium sulfate has lower economic value, need to be equipped with sewage treatment device |
| Iron method | High product purity, no by-products, less pollution | High cost |
2.2 Liquid-Phase Method
The liquid-phase method uses water as a solvent to mix lithium carbonate, ferric nitrate, and monoammonium phosphate for a hydrothermal reaction to obtain a precursor, and then through crushing and sintering steps to get LiFePO4.
| Advantages | Disadvantages |
|---|---|
| Good product uniformity and consistency as raw materials can be mixed at the molecular level in solution | Complex reaction process, difficult to control |
3. Development Status of LiFePO4 Cathode Material Industry
3.1 Capacity
In recent years, the capacity of LiFePO4 in China has grown rapidly.
| Year | Capacity (t/a) |
|---|---|
| 2021 | 970,000 |
| 2022 | Over 2,500,000 |
| 2023 | 3,884,000 (actual), 1,645,000 (under construction), 908,600 (planned but not constructed), total 14,615,000 |
| The enterprises in the LiFePO4 industry can be classified into several types: | |
| Enterprise Type | Representative Enterprises |
| — | — |
| Positive electrode material enterprises | Hunan Yuneng New Energy Battery Material Co., Ltd., Hubei Wanrun New Energy Technology Co., Ltd., Shenzhen Dynanano Technology Co., Ltd. |
| Lithium battery manufacturers | CATL New Energy Technology Co., Ltd., BYD Co., Ltd., Guoxuan High-Tech Co., Ltd. |
| Phosphorus chemical/phosphorus compound fertilizer enterprises | Sichuan Development Longmang Co., Ltd., Xinyangfeng Agricultural Technology Co., Ltd. |
| Titanium dioxide enterprises | Longbai Group Co., Ltd., CNNC Huayuan Titanium Dioxide Co., Ltd. |
| Other cross-border enterprises | Yantai Wanhua Chemical Co., Ltd., Shenghong Group Co., Ltd. |
3.2 Competition Pattern
The competition pattern in the domestic LiFePO4 cathode material industry is relatively stable.
| Year | CR3 (%) | CR5 (%) |
|---|---|---|
| 2019 | 57 | 83 |
| 2022 | 54 | 73 |
| 2023 | 55 | 70 |
3.3 Price Trend
The price of LiFePO4 has fluctuated significantly.
| Time Period | Price Trend | Reasons |
|---|---|---|
| From December 2020 to March 2022 | Rose from an average of 35,500 yuan/t to 167,200 yuan/t | Rapid growth in demand for new energy vehicles and new energy storage, price increase of raw materials lithium carbonate and iron phosphate |
| From March 2022 to January 2023 | Fluctuated between 167,200 yuan/t and 156,600 yuan/t, with a maximum of about 175,000 yuan/t | – |
| From February 2023 to December 2023 | Fell to about 42,000 yuan/t | Large amount of LiFePO4 capacity put into production, sharp fall in the price of lithium carbonate |
4. Challenges Faced by the LiFePO4 Cathode Material Industry
4.1 Severe Excess Capacity
Since 2022, a large number of LiFePO4 production facilities have been built and put into production. By the end of 2023, the actual capacity reached 3,884,000 t/a, while the sales volume in 2023 was 1,650,000 t, resulting in a serious overcapacity. If the under-construction capacity is put into production within two years, the capacity may reach 5,530,000 t by 2025, while the predicted demand in 2025 is 2,500,000 – 3,000,000 t. This will lead to low capacity utilization and intensified price competition, reducing product profitability.
4.2 Dramatic Fluctuations in the Price of Raw Material Lithium Carbonate
Lithium carbonate accounts for a relatively high proportion of the production cost of LiFePO4, reaching about 80% at its highest. In 2022, the price of lithium carbonate soared to 600,000 yuan/t due to tight supply and demand, and enterprises had to pay in advance to purchase it, occupying a large amount of cash flow. In 2023, both the prices of lithium carbonate and LiFePO4 fell rapidly, and enterprises had to make provisions for impairment of inventory produced with high-priced lithium carbonate, resulting in huge losses for some enterprises.
4.3 Adverse Effects of Trade Protection Policies in Europe and America
China is a major exporter of new energy vehicles and lithium batteries. The rapid development of China’s new energy vehicle industry chain has put pressure on European and American countries, leading to a series of trade protection policies. For example, the EU launched an anti-dumping investigation into Chinese-exported new energy vehicles in 2023, and the New Battery Law and the European Critical Raw Materials Act were also promulgated, which will require Chinese enterprises to invest more resources to meet the requirements.
4.4 Substitution Risk of New Technologies
LiMnFePO4 is a new type of lithium battery cathode material formed by doping a certain proportion of manganese on the basis of LiFePO4. Its theoretical energy density is 10% – 20% higher than that of LiFePO4, and it has good thermal stability. Once its defects such as poor conductivity and short cycle life are solved, it may partially replace LiFePO4. Sodium-ion batteries also have the potential to replace LiFePO4 batteries to some extent under certain conditions.
5. Development Suggestions for the LiFePO4 Cathode Material Industry
5.1 Conducting Lithium Carbonate Futures Hedging Business
Given the large proportion of lithium carbonate procurement cost in the production cost of LiFePO4 and the significant price fluctuations in recent years, it is recommended that LiFePO4 enterprises appropriately conduct commodity futures hedging business. By matching the lithium carbonate commodity hedging business with the company’s production and operation, the future price of lithium carbonate can be locked through forward transactions to ensure the stability of raw material supply and cost control.
5.2 Overseas Layout of LiFePO4 Capacity
With the increase in overseas demand for LiFePO4 cathode materials driven by the export of domestic new energy lithium batteries, and considering the domestic overcapacity and fierce competition, it is recommended that LiFePO4 enterprises layout production capacity in countries with phosphorus and lithium resources. This can relieve competition pressure and improve profitability, and also avoid trade barriers imposed by European and American countries.
5.3 Upstream Extension of the Industrial Chain
At present, the self-supply ratio of LiFePO4 precursors in leading enterprises is relatively high. It is recommended that LiFePO4 enterprises further extend upstream to phosphorus resources or cooperate with phosphorus chemical and phosphorus compound fertilizer enterprises to build a complete industrial chain from phosphate ore to LiFePO4. In addition, enterprises with strength can acquire lithium ore resources or jointly establish factories with lithium carbonate enterprises to ensure the stable supply of lithium carbonate.
6. Conclusion
The LiFePO4 industry is currently facing challenges such as overcapacity, price fluctuations of raw materials, trade protection policies, and substitution risks of new technologies. However, through appropriate measures such as conducting futures hedging business, overseas capacity layout, and upstream industrial chain extension, the industry can achieve sustainable development. With the continuous growth of the new energy vehicle and energy storage industries, the demand for LiFePO4 batteries will continue to increase, and the industry still has broad development prospects.