According to data, the production of lithium iron phosphate cathode materials in China in February 2021 was 21320 tons, a slight decrease of 2.9% compared to the previous month's 21960 tons. A year-on-year increase of 412.50%. The overall market for lithium iron phosphate in February remained relatively hot, with demand maintaining a high level. Most manufacturers have already placed orders after the Spring Festival, so they will not take any holidays during the Spring Festival period to maintain full production. However, a small number of manufacturers have limited holidays or equipment maintenance, coupled with shorter production days in February, resulting in a slight decline compared to 21960 tons in January.

Looking back at historical data, since June last year, China's production of lithium iron phosphate has experienced continuous growth for nearly half a year, with a high growth rate of nearly 12% from July to October. As of February 2021, China's production of lithium iron phosphate cathode materials has increased by 187% compared to June last year, almost doubling. At the same time, compared with February 2020, the year-on-year growth of its output is more obvious, reaching 412.50%, mainly because last February, when the COVID-19 was raging, China's overall economic activity slowed down, the production and sales of lithium iron phosphate market were weak, and the base was too low.

However, it is worth noting that from the data, the share of leading enterprises in lithium iron phosphate materials is gradually decreasing. On the one hand, due to the recent booming downstream demand for lithium iron phosphate, its market share in the power battery and small power markets has gradually increased. Relying solely on the production capacity of current leading large factories is no longer sufficient to meet downstream demand. Some downstream battery companies have to be downstream compatible outside of first tier lithium iron enterprises, including a group of second and third tier lithium iron manufacturers in the supply chain, restarting idle production lines, resulting in an overall increase in market shipments and diluting the market share of leading enterprises. On the other hand, in recent years, the demand for downstream overseas household energy storage devices and power grids, as well as 5G base stations, has also exploded. Some manufacturers specializing in energy storage type lithium iron have also experienced an increase in shipment volume, driving the overall production of the market up.

Overall, the current iron lithium market has strong demand and insufficient production capacity. Although some manufacturers are still actively expanding production, considering their construction cycle and the time required for production line debugging, this supply-demand situation is expected to continue. After the Spring Festival, production will also rebound in March.