China’s Tianqi Lithium incurred a net loss of 7.9 billion yuan last year.

China’s leading lithium company, Tianqi Lithium, announced its largest loss since going public, with a net loss of 7.905 billion Chinese yuan, far exceeding the full-year profit of the previous year.

The company reported on the evening of March 26th, as reported by Caixin, that in 2024, its operating income was 13.063 billion yuan, a decrease of 67.75% year-on-year. The net loss attributable to the company’s shareholders was 7.905 billion yuan.

The net profits for Q1-Q4 were -3.897 billion yuan, -1.309 billion yuan, -0.496 billion yuan, and -2.203 billion yuan respectively. The company plans not to distribute cash dividends, issue bonus shares, or increase capital through surplus reserves.

Tianqi Lithium stated in the announcement that the main reasons for the performance changes include a significant decline in lithium product prices due to misalignment in pricing mechanisms, a decrease in performance at its important affiliate company Sociedad Químicay Minerade Chile S.A. (SQM) along with a decrease in net profit due to the latest results of tax litigation, an increase in impairment losses, and an increase in exchange losses.

According to Sichuan Daily News, Tianqi Lithium’s net profit surged by 1,060.47% in 2022, reaching 24.12 billion yuan; however, in 2023, it plummeted by 69.75% to a profit of 7.297 billion yuan, and in 2024, it incurred a loss of 7.905 billion yuan.

In recent years, global lithium resource capacity has continued to increase, leading to a fluctuating supply and demand situation in the lithium market. Lithium prices have also been volatile. In 2022, lithium carbonate prices soared, reaching as high as 600,000 yuan per ton. However, in 2023, prices plummeted significantly to below 200,000 yuan per ton. By 2024, prices first rebounded but then continued to fall, dropping to about 75,000 yuan per ton by the end of the year, approaching the cost line, representing a decrease of over 85% compared to the peak period.

Additionally, due to the accelerated nationalization process of lithium resources in Chile and a substantial shrinkage in net profits at SQM due to tax litigation, Tianqi Lithium’s investment income in 2024 decreased significantly compared to 2023, further contributing to the company’s losses. Furthermore, asset impairment losses of 2.114 billion yuan were incurred due to projects under construction in Australia and inventory depreciation.

Not only Tianqi Lithium, but most companies in the lithium mining industry, found themselves in a state of loss, given the industry cycle they are in. In China, according to annual reports or performance forecasts, Ganfeng Lithium and Shengxin Lithium Power, other major players in the lithium mining sector, are also experiencing performance losses. Ganfeng Lithium is expected to incur a net loss of 1.4-2.1 billion yuan, while Shengxin Lithium Power is facing a loss of 622 million yuan.