Ganfeng Lithium: Energy Storage Battery Designed Capacity is 30GWh, Lithium Carbonate Supply and Demand May Improve Next Year

On November 25, Ganfeng Lithium disclosed in its latest investor relations activity record that the company's lithium battery segment currently generates revenue primarily from power energy storage, followed by consumer electronics batteries. The energy storage market is developing well, and the company is focusing on energy storage as the driving force for its lithium battery business, benefiting from the high growth of the industry.

Specifically, Ganfeng Lithium's energy storage battery has a designed capacity of 30GWh, and the capacity utilisation rate of energy storage batteries is expected to improve next year. As the fastest-growing business in the company's lithium battery segment, the company's energy storage not only involves batteries but also extends to midstream energy storage systems and energy storage station construction, developing 4C and 5C power fast charging businesses. The company is optimistic about the future long duration energy storage (LDES) market and is preparing to deploy large-capacity batteries. The company mainly focuses on the domestic energy storage market, with a small amount of export business.

Ganfeng Lithium also mentioned that since the beginning of this year, due to the cyclical mismatch of supply and demand in the lithium industry and changes in the inventory procurement pace of the new energy downstream, lithium prices have shown a trend of jumping initially and then pulling back. For Ganfeng Lithium, lithium product sales in the first three quarters increased YoY, but performance was affected by lithium price fluctuations. The company's operating income in the first three quarters was 13.925 billion yuan, with a net loss attributable to shareholders of 640 million yuan. In Q3 alone, the company's operating income was 4.336 billion yuan, with a net profit attributable to shareholders of 120 million yuan.

To cope with the cyclical fluctuations and risks of the lithium industry, Ganfeng Lithium focuses on increasing income and reducing expenditure and prudent operations, strictly controlling the pace of capital expenditure and expanding capacity based on market demand changes. The company prioritises the commissioning of resource projects that can generate short-term benefits to optimise the efficiency of capital use.

Among them, Ganfeng Lithium's Cauchari-Olaroz salt lake project in Argentina is progressing smoothly in capacity ramp-up, reaching about 80% capacity utilisation rate; the Mariana salt lake project is expected to start trial production by year-end and ramp up capacity next year; the first phase of the Goulamina spodumene project in Mali has undergone trial production and is expected to be officially commissioned in December. This project has a high ore grade and strong competitive production costs.

Additionally, Ganfeng Lithium continues to expand its downstream business through the expansion of its lithium battery recycling business. Currently, 20,000 mt/year of lithium carbonate project and 80,000 mt/year iron phosphate project by its subsidiary are actively under construction, with production lines expected to be connected and gradually commissioned soon.

Regarding the future trend of lithium prices, Ganfeng Lithium stated that recent market supply and demand changes have caused significant fluctuations in lithium carbonate prices. The company remains optimistic about the medium and long-term demand for the lithium industry and expects lithium carbonate prices to gradually return to a reasonable range. Currently, lithium prices are still at a low point and may maintain a fluctuating trend next year. However, several mines in Australia have gradually reduced or ceased production due to lithium ore prices reaching cost pressure levels. The company expects the supply-demand relationship to improve next year, making it difficult for lithium prices to continue declining from a fundamentals perspective. From a global perspective, domestic demand growth is relatively more certain, but overseas demand faces uncertainties due to factors such as the Russia-Ukraine war and the US presidential election.