On Monday night, the three major lithium industry giants in China issued performance forecasts for the first half of this year, indicating that the continued challenges in lithium products have been dragging down company profits. As a result of this news, the stock prices of Chinese lithium producers plummeted significantly on Tuesday.
Tianqi Lithium announced its performance forecast on Monday night, expecting a net profit attributable to shareholders of the listed company of 0 million to 155 million yuan (21.6 million US dollars) in the first half of this year.
Another lithium industry giant, Ganfeng Lithium Industry Group, stated in its performance forecast released on Monday that it expects a net loss of 300 million to 550 million yuan in the first half of this year.
Shengxin Lithium Energy Group’s performance forecast revealed that it expects a net loss attributable to the parent company of 730 million to 850 million yuan in the first half of this year, which is a further expansion from the 187 million yuan loss in the same period last year.
All three manufacturers mentioned in the performance forecasts cited the decline in lithium product prices as one of the main reasons affecting company performance.
According to Bloomberg, Shengxin Lithium Energy Group’s stock price on the Shenzhen stock market fell by 5.1% on Tuesday. In Hong Kong, Ganfeng Lithium Industry’s stock price plunged by 6.8% in the morning trading session, while Tianqi Lithium Industry’s stock price dropped by 3.3%.
Even after two consecutive years of price declines, the spot price of lithium carbonate in China fell by nearly 20% in the first half of this year. This has dealt a heavy blow to the lithium industry as it faces issues of oversupply and slower-than-expected growth in electric vehicle sales.
According to data from the Shanghai Nonferrous Metals Network, on July 15, the average price of battery-grade lithium carbonate was 64,900 yuan per ton. The average price of industrial-grade lithium carbonate was 63,300 yuan per ton. Lithium carbonate had reached around 560,000 yuan per ton in November 2022.
In a report by Securities Times in June this year, Han Minhua, an analyst at Zeruida Information’s Fubao Lithium Industry, analyzed the sharp decline in lithium carbonate prices. Han pointed out that in January of this year, the domestic spot price of lithium carbonate was around 77,000 yuan per ton, but by May 29, the price had plummeted to 59,600 yuan per ton, a decline of 22.6%.
Regarding the reasons for the rapid decline in lithium carbonate prices this year, Han mentioned that the ongoing supply-demand imbalance in China remains a major issue suppressing the market, and the drop in raw material prices is another factor influencing the lower lithium carbonate prices. Consumption in end-user industries did not increase as expected after the second quarter of this year.
Zheng Xiaoqiang, a lithium industry analyst at Shanghai Steel Union New Energy Enterprise Department, also believes that the supply side of lithium carbonate will remain oversupplied in 2025. Against the backdrop of strong supply and weak demand, lithium carbonate prices will continue to decline. In the long term, there are no apparent signs of improvement in the oversupply situation in the market, and lithium prices will gradually approach the median cost of lithium ore deposits.
Guo Xiaolin, Assistant Director of Investment of the Equity Investment Department at Boshi Fund, analyzed on Economic Observation Network, stating that the uncertainty of tariff policies will bring uncertainty to the demand for lithium, as the United States has a higher share in the global energy storage market.