The "Lithium Mining Titans" Cross the Cycle

Ask AI · How does the vertical integration model help lithium companies cope with cyclical fluctuations?

China Economic Journal Reporter Li Zhe Beijing Report

Recently, Ganfeng Lithium (002460.SZ, 01772.HK) and Tianqi Lithium (002466.SZ) successively released their 2025 “performance reports.”

Against the backdrop of the “V-shaped” trend in lithium carbonate prices, these two lithium giants both halted their performance decline and achieved profitability.

Ganfeng Lithium told China Business Journal that it has a vertically integrated business model, building an industrial ecosystem that connects upstream, midstream, and downstream. The various business segments work synergistically to improve operational efficiency and profitability.

Turning Losses into Profits

Financial data shows that in 2025, Tianqi Lithium achieved operating revenue of 10.35B yuan, down 20.80% year-on-year; net profit was 462 million yuan, up 105.85%. In 2024, Tianqi Lithium had a net loss of 7.9B yuan.

Ganfeng Lithium achieved operating revenue of 23.08B yuan in 2025, up 22.08% year-on-year; net profit was 1.61B yuan, up 177.77%. In 2024, Ganfeng Lithium’s net loss was 2.07B yuan. Notably, in 2025, Ganfeng Lithium’s non-recurring net profit still showed a loss of 385 million yuan, but this was a 56.56% reduction in loss compared to the previous year.

The profitability turnaround of these two companies, which have a high proportion of lithium resources, is directly related to the rise in lithium carbonate prices.

The reporter learned that in the first half of 2025, lithium carbonate prices once fell below 60k yuan/ton, but by the end of the year, they rebounded to 130k yuan/ton.

Wang Xiaoshen, Vice Chairman and President of Ganfeng Lithium, said at the earnings briefing that in 2025, the global lithium salt industry experienced a deep adjustment. Due to changes in supply and demand patterns and market fluctuations in lithium products, prices hit a new low in the first half but rebounded, leading to an improvement in the company’s operating performance year-on-year. Although the non-recurring net profit was negative for the year, the company turned profitable starting from the fourth quarter, showing an overall positive trend.

Currently, the main drivers of lithium demand are in the fields of power batteries and energy storage batteries.

An industry insider said: “Under the influence of market-based pricing for green electricity, the energy storage market is growing, and AI-driven data centers (AIDC) are boosting growth in the energy storage sector, causing a reversal in the supply-demand relationship of lithium resources.”

Tianqi Lithium mentioned that with the full explosion of AIDC, grid-side, and user-side energy storage, the shipment of energy storage cells is expected to exceed 900 GWh in 2026, a year-on-year increase of over 50%. The incremental demand from energy storage alone corresponds to more than 150k tons of lithium carbonate.

According to GaoGong Lithium Battery data, by 2030, AIDC energy storage shipments are expected to correspond to about 180k tons of lithium carbonate demand.

From the supply side, as of March 19, Mysteel data shows that merchant spot inventory of sellable lithium ore is only 100k tons, less than half of the about 250k tons at the end of January. Multiple institutions’ surveys indicate that in the second and third quarters, downstream cathode material manufacturers are in expansion cycles, with new lithium iron phosphate (LFP) capacity exceeding 2 million tons.

Tianqi Lithium told the reporter: “Overall, lithium carbonate demand is expected to continue growing, while supply remains uncertain. The spot market fundamentals are relatively strong. Recently, lithium prices fell to 140k yuan/ton in futures trading, prompting buyers to stockpile. During the later stage of seasonal supply and demand mismatch, lithium prices may rise again.”

Responding to the New Cycle

Currently, many institutions predict that from 2026 to 2035, global lithium demand will be on a clear upward trajectory.

Ganfeng Lithium said it remains optimistic about demand in the lithium industry. After nearly two years of cyclical adjustments and industry consolidation, energy storage has entered an explosive growth phase, which is expected to continue into 2026. Meanwhile, emerging electricity scenarios such as AI computing centers and data centers are driving increased demand for backup power and storage solutions. Coupled with the global emphasis on energy independence, energy storage demand is experiencing additional growth. In the field of power batteries, geopolitical tensions in the Middle East have unexpectedly accelerated electrification in Southeast Asia, Australia, and other regions, with strong sales of four-wheeled electric vehicles and increased penetration of two-wheeled electric vehicles locally. From a total lifecycle cost perspective, downstream automakers have a relatively high tolerance for lithium price fluctuations, and high lithium prices have limited impact on the cost of power batteries and vehicles, providing strong bottom support for lithium prices.

A new lithium battery cycle is forming. Compared to the peak of 600k yuan/ton in lithium carbonate prices in 2022, the current growth engine has shifted from new energy vehicles to energy storage and solid-state batteries driven by AI and low-altitude economy. In response to this change, lithium mining companies in 2025 are diversifying their layouts to balance the performance impact of lithium carbonate price fluctuations.

The reporter noted that in Ganfeng Lithium’s revenue structure, the proportion of revenue from lithium mining has been decreasing year by year. The 2025 financial report shows that basic chemical materials accounted for 55.79% of total revenue, down 7.77 percentage points from the previous year; lithium battery and cell businesses increased their share to 35.67%, up 4.48 percentage points. In 2022, lithium battery products accounted for 15.49% of Ganfeng Lithium’s total revenue, while basic chemical materials accounted for 82.68%.

Ganfeng Lithium stated that the company’s vertically integrated business model has built an industrial ecosystem connecting upstream, midstream, and downstream. The different segments work synergistically to improve operational efficiency and profitability.

Regarding its layout in the lithium battery field, Ganfeng Lithium told the reporter that the company aims to better integrate into user scenarios, not just selling batteries but also deeply involved in scenarios like bus swap stations, low-altitude flying, and zero-carbon parks, creating solutions truly needed by the market. The advantage of this ecosystem layout lies in the synergy among business segments, which helps provide more comprehensive one-stop solutions for users.

Tianqi Lithium has long focused on upstream lithium resources. After years of exploration, it has established an integrated “resources–capacity–customers” supply chain system, combining “long-term contracts for volume locking + futures hedging” sales strategies to form a systematic response mechanism. Long-term contracts provide stable supply guarantees for core customers, while futures tools offer effective risk management. The synergy between the two helps smooth cyclical fluctuations and ensures long-term win-win relationships with customers.

In July 2023, the Guangzhou Futures Exchange (hereinafter “GFE”) launched lithium carbonate futures. Ganfeng Lithium said that since the launch of lithium carbonate futures, the industry’s sales and pricing models have undergone significant changes, with interaction between the spot and futures markets. The company leverages its advantages in both lithium salts and batteries to conduct hedging, helping to smooth price volatility risks.

In January 2026, “Tianqi Lithium” was added as a registered brand for lithium carbonate futures on GFE, making Tianqi Lithium the first Chinese lithium company to hold both delivery warehouse qualification and registered brand for lithium carbonate futures.

This strategic layout is based on Tianqi Lithium’s judgment of the competitive logic in the lithium battery industry. Tianqi Lithium believes that the current global lithium battery market competition is shifting from “resource quantity competition” to “high-standard lithium product competition.”

Tianqi Lithium stated that this change mainly manifests in three dimensions: first, whether it can reliably supply high-quality, high-standard lithium products; second, whether it has the capability to lead in next-generation battery materials; third, whether it can quickly coordinate emerging scenarios like low-altitude economy, humanoid robots, and AIDC to achieve deep integration of materials and application scenarios.

“For the company, high-quality development of the lithium battery industry depends not only on resources but also on supply chain resilience, raw material stability, and long-term industry chain collaboration. Therefore, our investment decisions always rely on medium- and long-term supply and demand judgments and project economics, rather than short-term price fluctuations. We have initiated an integrated upstream and downstream cooperation model and established long-term partnerships with several leading downstream enterprises. In the future, we will continue to focus on global high-quality lithium resource opportunities and deepen collaboration with partners across the new energy value chain,” Tianqi Lithium said.

(Edited by Dong Shuguang, reviewed by Wu Kezhong, proofread by Yan Yuxia)