Xinhua Finance in Shanghai, April 22: In the first quarter, Tianqi Lithium's profit is expected to increase by 18 times, Hengtai Lithium's and Zangge Mining's net profit has doubled, and Ganfeng Lithium has significantly reduced losses... Many lithium carbonate companies said, "The products are taken away by customers as soon as they come off the line, and the production speed can't keep up with the order demand." Looking ahead to the whole year, the expectation of a tight balance between supply and demand has increased, the lithium price center has remained stable, and the profitability of the lithium mining industry has become more predictable.

Currently, there is a strong demand for lithium carbonate, and products are immediately taken away by customers as soon as they come off the production line, unable to keep up with the pace of orders. For the continuous strengthening of the lithium carbonate market, the person in charge of a Qinghai-based lithium carbonate production enterprise with an annual output of 10,000 tons expressed a slightly excited tone.

The person in charge told reporters that the company's current lithium carbonate sales are only for long-term agreement customers, and all the "quotas" for the whole year have been allocated, and there is no inventory at present.

The lithium carbonate market is heating up, which is also reflected in the first-quarter performance of lithium mining companies in the A-share market. Tianqi Lithium's profit is expected to increase by up to 18 times, Yanchat Shares and Zangge Mining's net profit has doubled, and Ganfeng Lithium has significantly turned a profit... Overall, driven by the resonance of downstream power and energy storage battery demand and the stabilization and recovery of lithium carbonate prices, lithium mining companies have re-launched the "profit-making mode".

According to the information learned from journalists, the performance of lithium carbonate in the first quarter is expected to continue throughout the year. The industry generally judges that from the limited supply growth and the strong downstream demand, the supply of lithium carbonate may maintain a tight balance throughout the year, and the probability of large price fluctuations is low. Enterprises with low cost and high self-sufficiency rate will continue to lead in the new round of competitive pattern.

First-quarter performance across the board; lithium prices rebound to boost profit momentum.

From the first quarter performance, A-share lithium mining companies are reporting good news, with leading enterprises achieving a significant rebound in profits, the sector has emerged from the deep adjustment cycle from 2024 to the first half of 2025, and the effect of making money is fully returning.

As the industry leader, Tianqi Lithium's profit forecast release sends a positive signal of the industry's upsurge. According to the disclosure, the company is expected to achieve a net profit of 1.7 billion to 2 billion yuan in the first quarter, a year-on-year increase of 1530.31% to 1818.01%. The company's performance has increased mainly due to the rise in lithium product prices and the increase in returns from the Chilean salt lake assets in which it has a stake.

It should be noted that the lithium price was in a sluggish phase in the first quarter of 2025, and the year-on-year data of Tianqi Lithium has limited reference value. Tianqi Lithium's net profit for the fourth quarter of 2025 was 283 million yuan. Based on this, the company's profit for the first quarter of this year is expected to increase by 501% to 607% quarter-on-quarter, and the first quarter performance can be said to be fully beyond expectations.

Ganfeng Lithium's performance is also remarkable, benefiting from the release of production capacity and the rise in lithium prices. The company expects to achieve a net profit of 1.6 billion to 2.1 billion yuan in the first quarter, significantly turning a profit from a loss. At the same time, Tianhua New Energy is expected to see a more than 27-fold increase in first-quarter profits, and Zhongke Resources is expected to see a year-on-year increase of more than 270% in the first quarter. The overall trend of the industry has reversed.

Lithium companies in salt lakes have become the "top students" of profit in the first quarter, thanks to their innate cost advantages. Zangge Mining achieved a net profit of 1.574 billion yuan in the first quarter, a year-on-year increase of 110.6%. The average sales cost of lithium carbonate at 49,400 yuan/ton is still eye-catching, and the 62.64% gross profit margin reflects the profitability of lithium extraction from salt lakes when lithium prices are on the rise.

Sino Lithium, on the other hand, relied on the stable output of new and old projects, producing 19,500 tons of lithium carbonate in the first quarter, selling 16,800 tons, and achieving a net profit of 2.939 billion yuan, a year-on-year increase of 1,474.4%. In terms of the first quarter of this year, Sino Lithium's net profit decreased by 26.0% compared to the same period last year, but this was due to the high base effect of about 2 billion yuan in one-time tax benefits in the fourth quarter of 2025. If we eliminate the one-time benefits in the fourth quarter of 2025, the profit in the first quarter of this year increased by 49% compared to the previous quarter, and the first-quarter performance also exceeded expectations.

Unlike past cycles, the performance growth of lithium mining companies in this round shows structural differentiation: companies with their own mines and high self-sufficiency of resources have greater profit elasticity, while those that purchase refined ore for smelting have relatively mild profit recovery, and the industry has shifted from "universal increase and universal profit" to priority benefits for high-quality capacity.

Strong downstream demand; full-year tight balance is expected to be lifted.

It is not difficult to see from the performance of industry companies in the first quarter that the trend of lithium prices is positively correlated with profitability, and the supply and demand pattern plays a decisive role in the trend of lithium prices.

"The tight supply situation at the lithium resource end is gradually emerging." A relevant person from Tianqi Lithium said that given that the construction, resumption, and expansion cycles of lithium mines are all longer than those of the lithium salt processing link, coupled with the impact of external environmental changes and other factors, the supply of lithium mines is expected to remain tight in the first half of this year.

A source from a lithium salt manufacturer in Qinghai directly stated that the company's current production of lithium carbonate can no longer meet the order demands of customers. "The common problem of customers is whether they can supply more goods," the source said, and based on the enthusiasm of downstream customers to purchase goods, the shortage of lithium carbonate may continue throughout the year.

Multiple industry analysts and corporate figures surveyed hold the same view, that the global lithium carbonate market may bid farewell to the previous oversupply pattern, and instead, turn to a tight balance for the whole year and structural mismatch on a quarterly basis.

From the supply side, it may exhibit characteristics of controllable increment and slow release. Institutions predict that the global lithium carbonate production in 2026 will be approximately 2.13 million tons of LCE, a year-on-year increase of 28%. However, the new production capacity is concentrated in the second half of the year, resulting in limited effective supply in the first quarter. Domestic supply mainly comes from lithium extraction from salt lakes and spodumene ore. Most projects are in the production capacity ramping-up period, leading to limited increment in the first half of the year.

The issue of lithium mine exports in Zimbabwe, a market focus, affects the overall controllability. "Although Zimbabwe has recently resumed exports of compliant enterprises with quota system, only the top mining companies are operational and have obtained permits." A person familiar with the development of overseas lithium mines believes that Zimbabwe accounts for about 10% of the global lithium supply. Under the quota system, the actual supply increment for the whole year is lower than expected, which is difficult to change the global tight balance pattern.

The demand side, on the other hand, shows a strong "dual-wheel drive" trend. Institutions generally predict that the global demand for lithium carbonate in 2026 will be between 2 million and 2.07 million tons, an increase of 27% to 30% year-on-year. Among them, energy storage batteries are expected to become the largest incremental source, which may drive the demand for lithium carbonate to increase by 40% to 50% year-on-year.

In addition, the inventory side has been at a three-year low. Data from Shanghai Non-Ferrous Metals Network shows that the current social inventory days of lithium carbonate are less than 20 days, and the inventory of lithium salt plants and battery factories is maintained at a low level. Low inventory provides strong support for price formation and further strengthens the tight balance pattern. A comprehensive judgment shows that the supply and demand gap of lithium carbonate in 2026 is clear, and the probability of a large surplus is extremely low.

Lithium prices still have room to rise; the "strong get stronger" competitive landscape is becoming clearer.

The high growth of industry companies in the first quarter is supported by the recovery of lithium prices and the tight balance of supply and demand. Overall, the price of lithium carbonate in the first quarter showed a "V-shaped" recovery, rising from 117,000 yuan/ton at the beginning of January to 150,000 yuan/ton at the end of March, with a quarterly increase of 28%. In terms of demand, the sales of new energy vehicles and the installation volume of power batteries increased by 32% and 38% year-on-year in the first quarter, respectively. The amount of energy storage bidding even increased by 120% year-on-year.

"The possibility of lithium prices falling is not high, and there may be some room for growth," said a person from a lithium mining company in Jiangxi. With the support of a tight balance between supply and demand, the price of lithium carbonate is expected to remain stable in 2026, which can not only cover the cost of most enterprises, ensure reasonable profits, but also not overly suppress downstream demand, achieving a virtuous cycle between upstream and downstream.

Against the backdrop of a slowdown in the growth of lithium-ion battery demand, will the rising lithium prices affect the enthusiasm for energy storage investment? From what I understand, the current energy storage can accept the lithium carbonate price of 170,000 RMB per ton.

"The energy storage industry is accelerating its construction, and our energy storage cells are also in a state of full production and no goods. We are not very sensitive to the increase in lithium carbonate." An official from a certain battery company in the A-share market told reporters that from the company's cell production schedule, the investment in energy storage projects is not only considering the price of raw materials, but more importantly, looking at the economy and the necessity of the project.

Against the backdrop of lithium prices stabilizing, the competitive dynamics of the lithium industry are subtly changing, with cost and resource self-sufficiency likely to become the key determinants of success or failure.

Firstly, lithium companies that are most cost-effective in terms of comprehensive costs are expected to stand out. Companies such as Huaneng Salt Lake Resources, Zangge Mining, and Tibet Mining rely on domestic salt lake resources, which have significantly lower costs than lithium extraction from ore. They have a high degree of self-sufficiency in resources and strong resistance to cyclical fluctuations. Among them, the profitability is the most certain and the elasticity is the greatest within the comfortable price range.

Secondly, global resource leaders will continue to lead the way. Tianqi Lithium and Ganfeng Lithium, with their overseas high-quality mines and full-industry chain layout, have locked in low-cost raw materials, and have prominent scale effects and technological barriers, fully benefiting from the industry recovery. At the same time, lithium companies with high self-sufficiency rates and ore processing enterprises will also have stable performances. Zhongzhi Resources and Yacar Group, which own compliant and operating mines overseas, have the advantages of stable supply and controllable costs, which may continue to increase their market share.

Looking ahead to the whole year, the lithium mining industry is highly likely to say goodbye to the period of large fluctuations and enter a new stage of stable prices, stable profits and stable growth. "The supply and demand balance will continue throughout the year, the central value of lithium prices will be stable, and the profitability will be more predictable." A person familiar with the lithium mining industry believes that the industry will shift from cyclical speculation to value growth, and the competitiveness of the three types of entities, namely, low-cost salt lake lithium extraction, resource leaders with high self-sufficiency rate and integrated enterprises of the whole industry chain, will gradually increase.

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