Lithium miners are reporting strong profits due to increased demand for battery storage, with some planning production expansions. Chinese majors Tianqi Lithium and Ganfeng Lithium saw their biggest profits in three years, while Albemarle noted a 45% rise in global lithium demand.
The surge in lithium demand and prices directly impacts the cost of electric vehicle batteries and grid-scale energy storage, influencing the pace of the global energy transition and the profitability of companies across the battery supply chain.
Lithium miners are reporting substantial profits for the first half of the year, fueled by a surge in demand for battery storage solutions. This increased demand is largely attributed to the expansion of renewable energy sources like wind and solar, which require batteries to store excess electricity. Geopolitical tensions in the Middle East have also accelerated the push for alternative energy, further boosting lithium demand as countries seek to reduce their reliance on oil and gas.
Two major Chinese lithium producers, Tianqi Lithium Corp. and Ganfeng Lithium Group, announced their most profitable six-month periods in three years. U.S.-based Albemarle reported a 45% year-over-year increase in global lithium demand through May, highlighting a supply that has not kept pace, thereby benefiting miners.
Officials from Tianqi Lithium Corp. cautioned that overseas supply might face challenges due to policy and logistics, suggesting that a return to full production could take time, which could lead to further price increases for lithium. The world's leading battery manufacturer, China's CATL, anticipates that energy storage will constitute about half of its global sales by 2030, underscoring the growing importance of this sector.