Summary of Key Points in Plain Language
The recently released financial reports for the first half of 2026 show that the 13 leading lithium mining and lithium salt companies in the A-share market have largely emerged from the losses they suffered last year. The total industry profit has increased by a factor of four, with 12 companies making a profit and only one incurring a loss. However, despite the overall increase, there is a significant difference in the profitability of these companies—this difference is largely due to whether they possess low-cost lithium mines of their own and the technology they use to extract lithium. After experiencing a dramatic price surge from 600,000 yuan per ton to a plummet to 60,000 yuan per ton, the entire lithium industry has changed its approach: no one is betting on huge price fluctuations to speculate in lithium futures or blindly building processing plants. Instead, all companies are focusing on securing upstream lithium resources to control the entire process from mining to producing lithium salt.
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Explanation in Four Easy-to-Understand Dimensions
1. How much of the “surge in performance” by lithium companies is real profit, and how much is due to last year’s heavy losses?
Many people, upon reading news about a company’s profit increasing by 49 times, assume the industry is booming. However, this increase is actually exaggerated by the extremely low base from last year. In the first half of 2025, lithium prices dropped to a low of 70,000 yuan per ton, barely more expensive than bottled water, and most companies were in the red. For example, Tianqi Lithium only made 84 million yuan in that half-year, which is less than what some popular live-streamers earn in just one half-year. This year, lithium prices have risen to 160,000 yuan per ton, meaning the profit per ton has increased significantly. Combined with higher sales volumes, the total revenue of the 13 companies has soared from 40 billion yuan to 87 billion yuan, and total profits have grown from 5.2 billion yuan to 26.4 billion yuan—this is genuine profit recovery. The industry’s “Matthew effect” is evident: three leading companies (Yanhu Shareholding, Ganfeng Lithium, and Tianqi Lithium) have taken more than 55% of the total industry profit, while the remaining 10 companies have received less than half of that. The lowest-performing company, Tibet Mining, earned only 60 million yuan in half a year, while Jiangte Electric even lost over 200 million yuan.
2. The rise in lithium prices from a “cheap” level to a “moderate” level is not due to speculation but a real shortage of supply:
The price rebound is entirely driven by a mismatch between supply and demand, with no speculative factors:
- Demand: Domestic production of power batteries and energy storage batteries increased by 53% in the first half of this year, with energy storage battery sales rising by 83%. This means that not only new energy vehicles but also household photovoltaic systems and grid energy storage systems are in high demand for lithium, exceeding even the peak demand in 2022.
- Supply: Major lithium-producing countries like Chile and Argentina are no longer selling raw lithium directly; they are either restricting exports or raising prices, forcing foreign companies to build processing plants locally. As a result, the global lithium supply has significantly decreased. In China, new regulations require that mining licenses match the actual types of minerals being mined, leading to the closure of many non-compliant mines. Consequently, domestic lithium cloud mine production decreased by 13.8% year-on-year.
With demand surging and supply constraints, lithium prices have naturally rebounded from their lowest point.
3. The difference in profit per ton of lithium carbonate: It all starts with the cost of mining
The current disparity in profitability among companies stems from the cost of extracting lithium. For example, extracting lithium from salt lakes in Qinghai and Tibet is the most cost-effective method, with a cost of only 30,000–50,000 yuan per ton, resulting in a net profit of over 100,000 yuan per ton when sold for 160,000 yuan. Companies like Yanhu Shareholding and Zangge Mining have profit margins of over 70%. In contrast, extracting lithium from spodumene (another method) costs 50,000–70,000 yuan per ton; if a company owns its own mines, it can still make a substantial profit. Tianqi Lithium’s G格林布什 mine in Australia, for instance, has one of the lowest costs globally, with a profit margin of over 70%. Extracting lithium from lithium cloud minerals is the most expensive, costing 60,000–80,000 yuan per ton. Companies that rely on purchased raw materials face higher costs, with profit margins of less than 10%. Jiangte Electric, the only company that lost money this year, did not have the right mining rights for its lithium cloud minerals and lost 137 million yuan by speculating in lithium futures.
4. The new survival logic for lithium companies: Whoever controls the mines will survive
In the past, when lithium prices soared to 600,000 yuan per ton, companies would invest in processing plants regardless of whether they owned mines, hoping to profit from high prices. However, when prices dropped to 60,000 yuan per ton in 2025, many processing plants without their own mines went bankrupt. Now, companies are much smarter and have shifted their investment focus to securing upstream lithium resources. They aim to have their own mines to supply their processing plants, eliminating the need to rely on external suppliers. For example, Shengxin Lithium, which previously relied on purchased lithium, recently invested 3.7 billion yuan to acquire the largest single lithium mine in Asia, ensuring that its own production can meet all its processing needs without being affected by international price fluctuations. In short, the new rule in the lithium industry is simple: those with low-cost, own mines can earn easily; those with a mix of own and purchased resources can barely survive; those that rely solely on purchasing raw materials will face significant losses at even small price drops.