Summary: In early July, 2024, Tianqi Lithium and Ganfeng Lithium released their performance forecasts for H1 2024.

On 9 July, 2024, Tianqi Lithium Co., Ltd. (Tianqi Lithium) released its H1 2024 performance forecast. Net profits attributable to shareholders of the listed company for the first half of 2024 will be -USD777.93 million–-USD686.49 million (-RMB5.53 billion--RMB4.88 billion), a YoY decrease of approximately 180.60%.

For the reason of the performance loss, Tianqi Lithium attributed the reason to the following two points:

• First, affected by the fluctuation of the lithium product market, sales price of the company's lithium products dropped significantly compared with the same period last year, and the gross profit of lithium products dropped significantly. In addition, there was a time mismatch between the chemical agent lithium concentrate pricing mechanism of Tianqi Lithium's holding subsidiary Talison Lithium Pty Ltd. and Tianqi Lithium's lithium chemical products sales pricing mechanism, which also led to the performance loss in H1 2024.
• Secondly, Tianqi Lithium disclosed that its associate Sociedad Química y Minera de Chile S.A. (SQM) has not yet published its Q2 2024 report, but has calculated the company's investment income in SQM for the same period by using a financial model and using information such as SQM's earnings per share for Q2 2024, which was forecasted by Bloomberg, as the basis for calculation.

On the same day, Jiangxi Ganfeng Lithium Group Co., Ltd. (Ganfeng Lithium) also announced the H1 2024 performance forecast, showing that net profits attributable to shareholders of the listed company are predicted to reach -USD175.84 million–-USD106.91 million (-RMB1.25 billion–-RMB760.00 million), a YoY decrease of about 117.18% YoY.

As for the reason for the performance loss, Ganfeng Lithium attributed the reason to the following two points:

• Firstly, during the reporting period, the share price of Pilbara Minerals Limited, a financial asset held by Ganfeng Lithium, fell, resulting in a large loss on fair value changes.
• Secondly, during the reporting period, affected by the downward cycle of the lithium industry, the prices of lithium salt and Li-ion battery products continued to fall; although shipments rose YoY, the operating results still showed a significant YoY decline.

 

As leading enterprises in lithium resources, Ganfeng Lithium and Tianqi Lithium have invested in lithium ore projects overseas, but some of the projects have recently been withdrawn by the local government or nationalised, which has led to more prudent risk assessments by Chinese companies in cooperation with overseas governments, organisations and enterprises.