Tianqi’s interim profit soars 12,000 per cent amid lithium supply crunch as the world scrambles for EV battery metal

Tianqi Lithium’s first-half net income skyrocketed by almost 12,000 per cent from a year earlier to a record 10.3 billion yuan (US$1.5 billion), it said in a filing on Tuesday. Ganfeng Lithium reported net income soaring more than 400 per cent in the first half to 7.25 billion yuan, although that was at the lower end of its forecast range.

Lithium carbonate prices have jumped almost 80 per cent in China so far this year, with the recent power crunch in Sichuan adding impetus to the rally. The province, home to over one-fifth of China’s lithium production, suffered two weeks of electricity curtailments in August. That created supply disruptions in an already-squeezed market, pushing the metal closer to record levels.

Demand for the battery material, meanwhile, is accelerating as the automotive industry increasingly turns to electric vehicles. Chinese EV sales could surge as much as 89 per cent this year, supported by post-lockdown subsidies and new model launches, according to Bloomberg Intelligence. UBS Group has lifted its long-term price forecast for battery-grade lithium by 38 per cent, as incentivizing new supply will require even higher prices, it said in a note on Friday.

Tianqi Lithium plans to restart a project at Yajiang Cuola Mine in Sichuan “to address the potential risks of lithium resource shortage and reliance on import of raw materials in the future,” it said in an earnings report. The company already said in July that it aims to more than double its capacity in the coming three years.