Tianqi Lithium: Net profit surged by 4,925%, yet its stock price fell by 13%.

Profit surges alongside falling share prices—this divergence stems from Tianqi’s 'extreme concentration' in strategic structure. Its fate hinges entirely on three tightly coupled levers: lithium prices, the Greenbushes mine, and SQM. Below, we break this down across six dimensions. Question One: Over-reliance on a single resource—the Greenbushes mine is aging. Nearly all chemical-grade spodumene concentrate required by Tianqi’s lithium chemical plants comes exclusively from this one mine. Though accounting for only 9.3% of global lithium resource projects in 2025, Greenbushes remains Tianqi’s absolute 'cash cow'—any disruption is magnified across the consolidated financial statements. A fire at CGP3 in June 2026 triggered maintenance-related shutdowns (the second such incident after delayed commissioning in January 2025); IGO’s latest report cut its FY2026 production forecast by ~11% to 1.375–1.425 million tonnes, citing declining ore quality—lower head grade and reduced recovery rates—classic signs of an aging mine. Meanwhile, the replacement project—the Cuola mine in Sichuan’s Ya’an—has held mining rights since 2012 but remains stuck in pre-development stages. The core contradiction? 'The best mine' does not equal 'the eternally best mine.' The physical width of Tianqi’s resource moat is quietly narrowing. Question Two: Strong cyclical exposure—2024’s RMB 7.9-billion loss could repeat. Tianqi’s net attributable profit swung violently—from RMB −7.905 billion in 2024 to +RMB 24.125 billion in 2022. Its 2024 loss alone nearly erased the entire prior year’s profit—because it lacks hedging mechanisms during lithium price downturns (Ganfeng has battery operations; Salt Lake has potassium fertilizer cash flow as a buffer; Tianqi has neither). Modeling shows that for every RMB 10,000/ton increase in lithium prices, Tianqi’s annual profit rises by ~RMB 2.5 billion—the highest elasticity among peers—but the inverse holds equally true. Question Three: SQM is being 'systematically dismantled,' and Tianqi’s core business is actually losing money. This is a unique problem facing Tianqi—not shared by Ganfeng or Salt Lake. In January 2026, Chile’s Supreme Court upheld the lower court ruling rejecting Tianqi’s appeal, thereby finalizing SQM’s partnership agreement with state-owned Codelco: 70% of the joint venture’s operating profits go to the Chilean government from 2025–2030, rising to 85% starting in 2031. Crucially, SQM will lose control over Atacama’s core lithium operations. Even more striking: Tianqi’s 2025 net attributable profit stood at just RMB 463 million, while its equity-method investment income from SQM alone reached RMB 665 million—meaning its core operations ran at a full-year loss, propped up solely by SQM’s contribution. Once this 'secondary axis' vanishes post-2031, what fills the profit void? Additionally, Australia’s tax authority is reviewing the TLEA transaction structure, exposing Tianqi to potential tax liabilities of ~AUD 17 million—a real and present risk. Question Four: Midstream underdevelopment—lithium salt capacity is only one-third of Ganfeng’s. Tianqi’s current lithium salt capacity stands at 121,600 tonnes/year versus Ganfeng’s 348,000 tonnes/year. Downstream integration is severely lacking—no battery manufacturing or energy storage system (ESS) terminal businesses exist to hedge against lithium price declines; only minor equity stakes (e.g., 2.91% in Weilan, 6.06% in SES AI) are held. This makes Tianqi a 'pure upstream player bearing the brunt,' whereas Ganfeng smooths cyclical volatility via its integrated value chain.

Is the lithium mining industry still worth investing in? What drives the boom-and-bust cycle—from lithium price surges to crashes?

VI. L0 · Long-Term Foundation Variable Current Status Assessment EV demand Long-term growth ↑ ESS demand High growth ↑↑ Global lithium demand Long-term growth ↑↑ Lithium consumption per unit Continuously evolving Observe Global lithium resources Adequate → Effective supply Not fully relaxed in medium term ↑ Capital expenditure Now responsive to price signals ↑ Industry cycle Post-overcapacity cleansing → rebalancing → Policy support New energy + resource security ↑ L0 Conclusion: Moderately bullish over medium-to-long term. Bullish rationale is *not* 'lithium scarcity', but rather: sustained demand growth coupled with a time lag in the ramp-up of low-cost, deliverable, and commercially viable supply. L0 is *not* upgraded to 'structurally strongly bullish': total resource abundance remains, and high prices continue to stimulate new supply. VII. L1 · Factual Layer Current status: Moderately bullish; tight balance is forming. Confirmed bullish facts: • Prices: Both lithium carbonate and spodumene have risen—price increases have now transmitted from futures markets into physical raw material channels. • Inventories: Still trending downward; however, SMM recently revised its inventory reporting methodology—old data cannot be meaningfully compared with new metrics over extended periods. • Demand: LFP batteries and energy storage systems continue providing robust support—demand has not collapsed structurally enough to explain the current drawdown in inventories. L1’s strongest counterpoint: Supply is recovering: China’s lithium carbonate output is expected to rise significantly in September—supply elasticity remains intact. Hence, we *cannot* declare 'confirmed supply shortage'; instead, we state: 'Supply recovery is currently offsetting demand growth.' VIII. L2 · Financial Layer Current status: Neutral. • Physical market: Strong spot prices, strong raw material prices, declining inventories. • Financial market: Futures exhibit high volatility; open interest (OI) shows no sustained strengthening trend; warehouse receipts have not collapsed continuously. Conclusion: L1 strength exceeds L2 strength—market participants have not yet fully priced in long-term supply shortages. IX. L3 ·博弈 Layer (Strategic博弈 / Market Power Dynamics) Current status: Moderately bullish—but unconfirmed. What truly matters is: How much marginal supply can high lithium prices re-activate? Key watchpoints: High-cost mines shutting down, new project launches, overseas developments, and policy-sensitive capacities. Currently, warehouse receipts are not declining continuously—there is insufficient evidence of deliverable-grade material exhaustion or short squeezes. Boundary definition: L3 is provisionally defined as 'rising supply-constraint risk'—*not* 'confirmed supply crisis.' X. Investment Implications Core Judgment: Avoid forecasting 'lithium prices will definitely surge'; instead, track evolving market states (current state: S2). • Bullish drivers: Demand growth + inventory drawdown + strong raw material pricing + delayed effective supply ramp-up. • Bearish drivers: High lithium prices stimulating restarts + new project commissioning + potential inventory re-accumulation. Conditions to await: Even after supply recovers, inventories must continue declining. • If met → S2 upgrades to S3 (structural shortage). • If not met (supply recovery → inventory re-accumulation) → downgrades to S1 (overcapacity cleansing / cyclical rebound). Company Stratification: Firms are no longer categorized simply as 'bullish' or 'bearish,' but assessed along five dimensions: lithium-price elasticity × cost advantage × production ramp-up reliability × balance-sheet strength × capex risk. Category Representative Companies Positioning / Characteristics Mature, low-cost resources Tianqi / PLS / SQM Most directly benefit from lithium price increases

ALB vs. SQM: Which Lithium Stock Should You Bet on Now?

Jun 29, 2026

This article compares lithium producers Albemarle Corporation and SQM, highlighting Albemarle as the more favorable investment due to higher earnings growth and lower financial risks amidst rising EV demand.