Core Insight: A single contract worth more than a company's total revenue over the past decade heralds a fundamental change in the rules of the game for the lithium iron phosphate (LFP) industry. LONGi Green Energy Technology recently announced that its LFP supply agreement with Chu Neng New Energy surged from 5 billion to 45 billion yuan, with a supply volume of 1.3 million tons. Amidst the current industry-wide price lows and widespread corporate losses, the emergence of such an "epic" long-term agreement, coupled with the recent industry-wide price hike of 3,000 yuan by leading firms, strongly signals that the extensive growth model of competing for market share through "trading volume for price" has reached a dead end. Industry competition is now entering a new phase characterized by long-term partnerships, technological assurance, and reasonable profits.

"Betting" on the Future: The Gamble of a Single Order vs. a Decade of Revenue

The amendment to the agreement between LONGi Green Energy Technology and Chu Neng New Energy was like a "depth charge". According to the supplementary agreement, the total sales volume of LFP cathode materials during their cooperation period (until 2030) was drastically increased from 150,000 tons to 1.3 million tons, with the total contract value estimated to exceed 45 billion yuan. This figure is astonishing because it presses precisely against LONGi's capacity limits: its designed capacity in 2024 was about 230,000 tons, meaning it would need to operate at nearly full capacity for the next five years to fulfill this single order.

An even more profound contrast lies in the fact that LONGi's total operating revenue from 2015 to 2024 accumulated to 42.807 billion yuan. This five-year, 45-billion-yuan order is crucial for the company, both in total and annual average terms, constituting a high-stakes "bet" on the industry's future. This reveals the core demand of downstream battery manufacturers: amidst industry uncertainty, they are willing to make massive, long-term commitments to lock in a reliable, high-quality supply partner.

The Evolution of Long-Term Agreement Logic: From Cost Transfer to Value Binding

This wave of long-term agreements is fundamentally different from previous ones. During the industry's upcycle, long-term agreements were tools for suppliers to secure stable profits. However, against the backdrop of continuously falling prices, the recent emergence of ten-billion-yuan-level long-term orders reflects the deep-seated strategic anxiety and value choices of battery companies.

1. Securing High-End Capacity, Avoiding "Technology Supply Cut-off": While overall industry capacity is excessive, high-quality capacity—particularly high-tap-density LFP capacity that meets fast-charging demands—remains tight. Through long-term agreements, battery giants are effectively "dividing up" the high-end capacity of leading material companies in advance. For instance, in its agreement with Hunan Yuneng, CATL directly paid a 500 million yuan advance to support its capacity construction and secured 100% priority supply rights from 2025 to 2029. This is essentially purchasing insurance against future "technology bottlenecks."

2. From Price Negotiation to Joint Development: Long-term agreements are no longer merely about pressuring prices but are increasingly becoming ties for deep industry chain collaboration. The agreement between Ronbay New Energy and CATL explicitly includes "jointly promoting the iteration and mass production adoption of high-tap-density LFP products". LONGi also stated that its new generation of high-tap-density products is undergoing verification testing with leading customers. This implies that profit margins will increasingly come from the technological added value co-created by both parties, rather than from single-minded procurement cost bargaining.

3. Reshaping the Industry Ecosystem, Accelerating Survival of the Fittest: When the orders from giants like CATL and BYD are concentrated and locked in with a few leading companies such as Hunan Yuneng, Ronbay New Energy, and Hunan Yuneng, a large number of second- and third-tier manufacturers lacking technical and financial strength will be squeezed out of the mainstream supply chain. Industry concentration will increase rapidly, resources will gather towards technology leaders, and the landscape will be set for profit recovery across the entire industry chain.

Price Hike Consensus: Collective Self-Rescue Below the Loss Baseline

While long-term agreements lock in "volume," the recent price hikes led by industry leaders are drawing a baseline for "price." Anda Technology's explicit price adjustment effective January 1, 2026, and similar prior actions by another top player, send a clear signal to the market: sustained sales below the cost line are untenable.

Industry association data reveals the harsh reality: from January to September 2025, the industry's average cost range was 15,714.8 to 16,439.3 yuan per ton (tax excluded). During the same period, market prices once bottomed out, trapping the entire industry in the paradox of "increased production without increased revenue". The initiative by the China Industrial Association of Power Sources calls for companies to use the cost index as a "benchmark" to stop vicious low-price competition. The price hikes by leading firms are a substantive response to this industry consensus, aiming to secure the necessary profit margin for technological innovation and sustainable development.

Conclusion: The 45-billion-yuan mega-deal and the industry-wide 3,000-yuan price hike are two sides of the same coin, jointly defining the new normal for the LFP industry. They declare the formal end of the old era characterized by reckless expansion fueled by capital and exchanging for market share through low-price dumping. Future competition will be multi-dimensional, based on technological moats, supply chain collaboration capabilities, and a long-term vision. The industry is shifting from a no-win "low-price game" to a "high-end race" centered on value creation and win-win cooperation. After the reshuffle, the survivors will not be the players with the lowest prices, but those offering the highest value and strongest partnerships.