On September 11, GGII published a report stating that with the US extending certain exemptions from Section 301 tariffs until November 29, 2025, China's energy storage sector continues to experience heightened activity. Combined with increasing demand for lithium iron phosphate (LFP) power batteries, China's LFP battery shipments are projected to exceed 1.3TWh by the end of 2025. This growth is expected to drive upstream phosphate cathode material market shipments beyond 3.5 million tons, achieving year-over-year growth of over 45%.

**Phosphate Cathode Material Industry Set for Third Expansion Wave**

Due to rapidly growing demand for Chinese LFP materials, capacity utilization rates for LFP materials are expected to increase significantly in 2025, with projections showing China's LFP material capacity utilization reaching 70% by year-end 2025. A new round of LFP material capacity expansion is anticipated to begin after 2026.

The main drivers include: 1) Continuous upgrades in LFP material products, with fourth-generation LFP material shipments growing substantially, leading some original single-firing capacity to transition toward dual-grinding, dual-firing processes; 2) Direct green electricity connection policies will drive LFP material capacity to shift toward regions rich in renewable energy, while capacity in high electricity cost areas will gradually reduce production due to cost pressures; 3) Some companies will gradually exit the market due to inability to keep pace with product upgrade cycles and insufficient production line design compatibility (such as kilns being too short, insufficient layer arrangements, sand mills being too small, etc.).

Currently, domestic lithium battery companies are accelerating their "beachhead" strategies in overseas markets, including CATL, FinDreams Battery, CALB, and EVE Energy, which is also driving accelerated overseas expansion of supporting phosphate cathode materials. Examples include Hunan Yuneng's layout in Spain, Wanrun's base in the United States, and LOPAL TECH's facilities in Indonesia and Spain.

Chinese phosphate cathode materials have planned overseas capacity of nearly 500,000 tons, with the vast majority of sand mills being procured from domestic companies. In terms of corporate layout and product certification, Huahui Intelligent's nano sand mills have obtained European CE certification, Yifu Machinery has established offices in Morocco, Japan, South Korea, Indonesia and other locations, and Boyi Industrial's high-flow horizontal sand mills have also received EU certification.

**Phosphate Cathode Materials Sector Serves as Core Growth Driver for Sand Mill Systems, Accounting for Over 80% of Total Market Scale**

In the lithium (sodium) battery field, sand mill systems are widely applied, primarily used in lithium iron phosphate cathode materials, lithium manganese iron phosphate cathode materials, conductive slurries, separator coating materials, polyanionic sodium battery cathode materials, silicon-based anodes, and solid electrolytes.

According to GGII data, the Chinese lithium battery sand mill system market (including feeding, pre-mixing, grinding, and demagnetization - encompassing supporting auxiliary stages for sand mills) reached 2.8 billion yuan in 2024 (production value basis, representing annual production and sales achieved; calculated based on new annual capacity additions and equipment system unit prices), growing 6% year-over-year.

Phosphate-based cathode material sand mill systems account for over 80% of the lithium battery sand mill system market scale, while other sectors hold smaller market shares. This segment represents the core focus area for mainstream domestic sand mill system manufacturers.

GGII data shows that China's phosphate-based cathode material sand mill system market generated total revenues of 1.5 billion yuan in 2024 (revenue recognition basis).

Regarding participating companies, China has numerous sand mill manufacturers, with the industry overall exhibiting a fragmented landscape of small and scattered players. Each sand mill manufacturer typically maintains relatively fixed customer relationships, resulting in intense market competition. Companies securing large customer orders generally hold relatively higher market positions.

GGII research indicates that leading companies in 2024 Chinese LFP cathode material sand mill system shipments include Huahui Intelligent and Langling Machinery, with market concentration continuing to increase. Leveraging product technology and customer advantages, Huahui Intelligent captured a 29% market share (revenue basis) in the lithium battery sand mill system sector in 2024, ranking first in the industry. Huahui Intelligent's market ranking in the phosphate cathode material sand mill system sector was second in 2023 and first in 2024, showing an upward trajectory.