Lithium Iron Phosphate Industry Joint Production Cuts: Longpan Technology Expands Capacity Against the Trend to Secure Major Customers

Based on the latest information found, I will provide a detailed analysis of the dynamics of the lithium iron phosphate (LFP) cathode material industry and Longpan Technology’s strategy of expanding capacity against the trend.

In late December 2025, the LFP cathode material industry witnessed a significant joint production cut action.

• Hunan Yuneng
  : From January 1, 2026, it is expected to reduce phosphate cathode material production by 15,000 to 35,000 tons
• Wanrun New Energy
  : From December 28, 2025, it is expected to reduce LFP production by 5,000 to 20,000 tons
• Desay Nano
  : From January 1, 2026, it will carry out maintenance and technical transformation on some production lines

1. Severe overcapacity
   : In 2024, domestic LFP cathode material capacity reached 4.7 million tons (up 34% year-on-year), while actual output was only over 2.3 million tons, with a capacity utilization rate of only about 50%[2]

2. Plummeting prices
   : The price of LFP material has plummeted from 173,000 yuan/ton at the end of 2022 to 34,000 yuan/ton in August 2025, a drop of 80.2%[2]

3. Continuous losses
   : The entire industry has been in continuous loss for over 36 months; the average asset-liability ratio of 6 listed companies is as high as 67.81%, and only 16.7% of enterprises are profitable[2]

4. Cost pressure transmission
   : The price of lithium carbonate has risen by more than 50% from its mid-year low, coupled with rising prices of various chemical raw materials[2]

This joint production cut is an important manifestation of the industry’s \