Both leading lithium producers released upbeat first-half profit projections on July 14, yet deeper analysis reveals concerning operational trends. Tianqi Lithium Corporation (002466.SZ) anticipates net profits of 0-155 million yuan for H1, achieving profitability after losses driven by reduced pricing cycle mismatches, improved earnings from associate SQM, and favorable currency movements. Meanwhile, Ganfeng Lithium Group Co.,Ltd. (002460.SZ) expects losses of 300-550 million yuan, narrowing year-on-year from 760 million yuan despite persistent pressure from declining lithium product prices.

The surface improvements mask underlying vulnerabilities. Tianqi’s Q2 net profit—projected between -104 million and 51 million yuan—represents a drastic sequential decline from Q1’s 104 million yuan gain. Ganfeng’s narrowed losses stemmed largely from non-recurring gains, including investment income from subsidiary Shenzhen Yichu Energy Technology Co., Ltd.’s divestment of energy storage assets. However, these were partially offset by fair value losses on Pilbara Minerals Limited (PLS) holdings, mitigated through collar option strategies. Crucially, Ganfeng’s core losses excluding one-time items ballooned to 500-950 million yuan, expanding significantly from 160 million yuan in H1 2023.

This stagnation follows historic 2023 losses: Tianqi recorded a 7.905-billion-yuan annual deficit—its largest since listing—while Ganfeng posted its first-ever loss of 2.074 billion yuan since its 2010 IPO. Both had expressed confidence in 2025 profitability during earnings calls, but current trends cast doubt on full-year recoveries.

Lithium carbonate prices—now hovering near 64,500 yuan/ton—reflect persistent industry headwinds. Shanghai Steel Union data shows a >10% price drop since January, exacerbated by oversupply and weak downstream demand. Analysts predict prolonged weakness through 2026, with prices fluctuating between 50,000-80,000 yuan/ton absent major catalysts. Zheng Xiaoqiang, lithium analyst at Shanghai Steel Union, notes recovery hinges on either explosive demand growth (e.g., solid-state battery breakthroughs) or significant mine closures creating supply imbalances.