Strong demand drives rapid growth in production and sales; lithium battery material companies see a batch of good news in first-half performance reports

◎Reporter Li Shaopeng

“Recently, demand for lithium carbonate has been relatively strong, and it’s operating at full production and full sales; production is somewhat unable to keep up with order demand.” A person from a lithium carbonate company with annual output at the ten-thousand-ton scale in Qinghai told the reporter from Shanghai Securities News.

Lithium carbonate’s lively market performance is just a snapshot of improved sentiment on the lithium battery materials end. The reporter’s interviews found that since 2026, rapid growth in demand for energy storage and power batteries has driven lithium battery materials demand to rise quickly. Prices of lithium battery materials such as lithium carbonate, lithium iron phosphate, and lithium hexafluorophosphate have all increased, and “strong demand with both volume and price rising at the same time” has become a key industry development theme.

Yahua Group’s profit is expected to increase more than 8 times in the first half of the year, Zangge Mining, Salt Lake Co., and EVE Energy are expected to see their net profits double, and GEM Flower Technology and Fuxiang Co. are set to turn losses into profits… Overall, driven by continued growth in downstream power and energy-storage battery demand and by a stabilization and rebound in material prices, lithium battery materials companies are reporting good first-half earnings in clusters.

From information obtained by the reporter through multiple channels, the high-visibility for lithium battery materials may extend through the whole year. Industry insiders generally believe that, given limited supply growth and strong downstream demand in practice, lithium battery materials supply may maintain a tight balance throughout the year, with a lower probability of major price swings.

Semi-annual earnings previews land in bulk

The lithium battery materials sector turns broadly bullish

Recently, A-share lithium battery materials listed companies have issued dense first-half earnings previews across the board. These include companies producing lithium salts, cathode materials, electrolyte, and related products, with full production and full sales supporting significantly bullish earnings.

The strongest upside is for lithium carbonate producers. Yahua Group expects to achieve first-half profits of 1.1 billion to 1.3 billion yuan, up 710.17% to 857.48% year over year. Regarding the profit increase, the company said that in the first half, both the sales volume and average selling price of lithium salt products grew in parallel, and main business revenue increased significantly.

According to a query, Yahua Group’s net profit in the first quarter was 339 million yuan. Based on this, the company’s second-quarter profit is expected to grow 124% to 183% quarter over quarter.

Lithium-extraction companies from salt lakes are also “top students” in first-half profitability, thanks to innate cost advantages. Zangge Mining expects first-half net profit of 3.55 billion to 3.75 billion yuan, up 97.20% to 108.31%; Salt Lake Co. expects net profit of 6.0 billion to 6.3 billion yuan, up 131.38% to 142.95%.

Cathode materials companies also performed strikingly well in the first half. GEM Flower Technology expects first-half net profit of 100 million to 120 million yuan, turning from loss to profit year over year. The reporter noted that GEM Flower Technology’s first-quarter net profit was 12 million yuan; based on this, the second-quarter net profit would increase 662% to 834% quarter over quarter.

Electrolyte additive companies’ profitability has also been substantially repaired. Yountai Technology expects first-half net profit of 265 million to 330 million yuan, up 350.68% to 461.22%; Fuxiang Co., driven by a simultaneous rise in both volume and price of electrolyte additive products, expects first-half profits of 165 million to 215 million yuan, a sharp year-over-year turnaround from loss to profit.

The reporter learned that this round of first-half earnings upturn among lithium battery materials companies may have three key characteristics: first, all-track profitability is rising in sync, not a short-term upswing limited to a single product category; second, second-quarter single-quarter profits generally rise quarter over quarter, and the momentum of business conditions has continuity; third, industry differentiation is intensifying—companies with their own resources have profit sensitivity far higher than pure toll-processing firms that purchase raw materials externally, with cycle dividends concentrating in high-quality capacity.

Rising both volume and price forms core support

Downstream demand still increasing

“Lithium battery companies’ first-half profitability has improved significantly. On the one hand, the base for the same period in 2025 was low; on the other hand, it’s due to the product volume and price rising brought by the downstream demand rebound.” A person from an A-share lithium battery materials producer said that from lithium hexafluorophosphate to lithium iron phosphate to lithium carbonate, as well as electrolyte additive VC (vinylene carbonate), the supply-demand landscape has all improved significantly.

Industry companies’ profitability has generally recovered.

According to data statistics from Baichuan Yingfu and Yangtze River Nonferrous metal spot prices, the lowest battery-grade lithium carbonate price in 2025 was 70k yuan per ton. This year’s June spot price was 160k yuan per ton to 170k yuan per ton, an increase of more than 120%; the bottom average price of lithium hexafluorophosphate last year was less than 50k yuan per ton; this year’s first-half average price exceeded 110k yuan per ton, a year-over-year increase of more than 130%; lithium iron phosphate has rebounded from a low of 30k yuan per ton to 64k yuan per ton—prices are nearly doubled—so lithium battery materials prices have rebounded across the board.

The rebound in lithium battery business conditions is closely related to strong demand from the new energy vehicle and energy-storage sectors, which is also an important driver behind this round of “volume and price rising at the same time” in lithium battery materials.

Taking energy-storage batteries as an example, the reporter learned that at present, leading battery companies are basically operating at full production, and some companies’ orders have already been scheduled into the early part of next year. Both upstream and downstream in the industrial chain are running at full capacity. A person from an A-share energy-storage battery company said that currently, the company’s energy-storage battery cells are at full production with no inventory available.

The “tight balance” pattern is hard to change in the short term

Lithium battery materials remain promising for the full year

“Recently, lithium carbonate prices have fluctuated greatly, but from the industry’s fundamentals there hasn’t been significant change.” A relevant executive of Ganfeng Lithium said at the company’s shareholders meeting held at the end of June. Currently, the supply-demand relationship for lithium salt products is still in a state of tight balance.

Not only lithium carbonate—structural tight balance in supply and demand may have already become a logic keyword for most lithium battery materials.

“In the first half, it was actually the ‘off-season’ for demand; in the second half, energy storage and power battery demand may be higher.” A person from the lithium battery industry told the reporter that, based on data such as downstream production scheduling, upstream lithium mine supply, and industrial chain inventories, as power batteries and energy-storage batteries enter a stocking peak season, material demand may remain at a high level.

Taking lithium carbonate as an example again: from the supply side, it may show characteristics of controllable incremental release and a slower ramp. Institutions estimate that in 2026, global lithium carbonate production will be about 70k tons LCE, up 28% year over year. On the demand side, there is a strong “dual-wheel drive” momentum. Institutions generally expect that in 2026, global lithium carbonate demand will be 160k to 170k tons, up 27% to 30% year over year. Among them, energy-storage batteries may become the largest source of incremental demand, potentially driving a year-over-year increase in lithium carbonate demand of 40% to 50%.

Cathode material manufacturers are also optimistic about industry prospects. Hun’an Yuning recently said that so far this year, industry demand has remained at a high level of business conditions; the company’s products have both strong production and strong sales, and capacity utilization has continued to stay at a relatively high level.