Lithium price falls below 70,000 yuan threshold! It took only two years for lithium industry giants to go from raking in 23 billion yuan to suffering a staggering loss of 7.9 billion yuan

Since April, the lithium carbonate market has continued to be dominated by a weak pattern driven by supply-demand imbalance, with both spot and futures prices falling below the 70,000 yuan/mt threshold, hitting new lows since 2021.

Futures prices have dropped by nearly 70% over the past two years.

Battery-grade lithium carbonate (daily average, yuan/mt) Image source: SMM

Spot MarketAccording to SMM data, spot lithium carbonate prices have fallen significantly. At the beginning of April, the average price of battery-grade lithium carbonate was around 74,000 yuan/mt. At the start of last week (April 21), battery-grade lithium carbonate was quoted at 69,300-72,400 yuan/mt, with an average price of 70,850 yuan/mt. On Friday (April 25), it was quoted at 68,200-71,400 yuan/mt, with an average price of 69,800 yuan/mt, representing a weekly average price drop of approximately 1,300 yuan/mt.

Futures MarketAt the beginning of April, the price of the most-traded LC2509 lithium carbonate futures contract was around 74,000 yuan/mt. On April 21, the most-traded LC2507 lithium carbonate futures contract fell below 70,000 yuan/mt to 68,500 yuan/mt, and closed at 68,180 yuan/mt on April 25.

On July 21, 2023, lithium carbonate futures were listed on the Guangzhou Futures Exchange, with an opening price of 218,000 yuan/mt. In just about two years, it has fallen below the 70,000 yuan/mt threshold, representing a drop of nearly 70%.

SMM believes that although some upstream lithium chemical plants have reduced production, the total output remains at a high level. Current ore prices are also on a downward trend, making it difficult to provide upward support for lithium carbonate prices. Considering the current market supply-demand situation and raw material price trends, it is expected that lithium carbonate prices will remain weak and volatile in the short term.

According to a research report released by Industrial Futures, the US has sent positive signals regarding tariffs on China, and market sentiment has improved somewhat. However, the loose fundamental situation of lithium chemicals remains unchanged. Cathode companies have not significantly increased their production schedules, maintaining on-demand purchasing of lithium carbonate. Inventory buildup pressure remains high across all links. Although upstream ore-based lithium production lines have slightly reduced production, salt lake capacity is gradually entering a seasonal production increase period, with limited relief in supply surplus pressure.

Based on analyses from major institutions, the decline in both lithium carbonate futures and spot prices is primarily due to the inertia of supply expansion and the deceleration of demand growth. Slow inventory digestion will limit the upside room for lithium carbonate prices, which are expected to fluctuate within the 65,000-75,000 yuan/mt range this year.

From the current lithium price perspective, it is approaching the cost line of externally purchased mines, and some companies may already be experiencing losses. In the long term, high-cost capacity may gradually exit the market, but the supply surplus situation is unlikely to change in the short term.

Several publicly listed lithium chemical companies have reported their first-ever quarterly losses.

Amid the bottoming-out of lithium prices, even leading publicly listed lithium chemical companies have not escaped the impact of the industry's downturn, with several companies turning from profit to loss in 2024.

Tianqi Lithium (002466)In 2024, the company achieved operating revenue of 13.063 billion yuan, down 67.75% YoY, and a net loss attributable to shareholders of publicly listed firms of 7.905 billion yuan, compared to a net profit of 7.297 billion yuan in the same period last year, turning from profit to loss. The company stated that despite achieving YoY growth in the production and sales volume of lithium compounds and derivatives in 2024, influenced by market fluctuations in lithium products, the overall market price of lithium products showed a significant downward trend, leading to a substantial decline in the company's lithium product selling prices and gross profit compared to the same period last year. Additionally, due to the time-cycle mismatch between the pricing mechanism of Talison's chemical-grade lithium concentrates, controlled by the company, and the pricing mechanism of the company's lithium chemical product sales, the company experienced a temporary operating loss in 2024.

Ganfeng Lithium (002460)In 2024, the company achieved operating revenue of 18.906 billion yuan, down 42.66% YoY, and a net loss of 2.074 billion yuan, down 141.93% YoY. Ganfeng Lithium stated that in 2024, the global lithium chemicals industry underwent a profound adjustment. Influenced by changes in the supply-demand pattern and market fluctuations in lithium products, the selling prices of lithium chemicals and lithium batteries fell, leading to a YoY decline in the company's operating performance.

Chengxin Lithium (002240)In 2024, the company achieved operating revenue of 4.581 billion yuan, down 42.38% YoY, and a net loss of 622 million yuan, compared to a net profit of 702 million yuan in the same period last year, turning from profit to loss. The company stated that in 2024, the lithium chemicals industry remained in a downturn. The continuous release of new capacity and the slowdown in demand growth led to an oversupply in the market, with significant price drops in lithium chemical products and lithium concentrates.

Dianchi.cn noted that the "lithium industry giants"—Tianqi Lithium and Ganfeng Lithium—reached their peak performance in 2022, with profits exceeding 20 billion yuan, at 23.059 billion yuan and 20.5 billion yuan, respectively. Chengxin Lithium achieved a net profit of 5.552 billion yuan in 2022, marking its best-ever performance.

In just two years, in 2024, Tianqi Lithium incurred its largest annual loss since listing, Ganfeng Lithium also reported its first-ever annual loss since listing, and Chengxin Lithium reported its first loss since renaming in 2020.

However, in Q1 2025, some publicly listed companies have achieved marginal improvements through cost optimization and resource integration. For example, Tianqi Lithium expects a net profit attributable to shareholders of publicly listed firms of 82 million-123 million yuan in Q1, compared to a loss of 3.897 billion yuan in the same period last year.

Tianqi Lithium stated that with the continuous stocking of newly purchased lithium concentrates in China and the gradual digestion of inventory lithium concentrates, the cost of chemical-grade lithium concentrates consumed in the production costs of the company's various production sites is basically close to the latest purchase price. Meanwhile, influenced by the positive impact of the ramp-up and technological transformation of self-produced plants, the company achieved YoY growth in the production and sales volume of lithium compounds and derivatives in Q1 2025.

Conclusion:

Overall, the bottoming-out and volatility of lithium prices are expected to continue. Companies with their own mines have stronger resilience, while those relying on externally purchased mines may continue to incur losses. The future recovery of the industry will depend on the stabilization of lithium prices, the exit of capacity, and the layout of high-value-added products. Meanwhile, industry chain companies are expected to enhance profitability by continuously reducing production costs through technological upgrades, process optimization, and refined management.