Is the lithium mining industry still worth investing in? From lithium price surge to crash—the cyclical recurrence.

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 Ongoing change Monitor Global Lithium Resources Adequate → Effective Supply Not fully relaxed in medium term ↑ Capital Expenditure Beginning to respond to price ↑ Industry Cycle Post-overcapacity rebalancing → Policy New energy + resource security ↑ L0 Conclusion: Moderately bullish over medium-to-long term. The bull case does not rest on 'lithium scarcity', but rather on sustained demand growth, coupled with a time lag in the expansion of low-cost, deliverable, and commercially viable supply. L0 is not yet upgraded to 'structurally strongly bullish': total resource availability is not scarce, and high prices continue to incentivize supply. VII. L1 · Factual Layer Current Status: Moderately bullish; tight balance is forming. Confirmed Bullish Facts: • Price: Both lithium carbonate and spodumene prices have risen—this increase has already transmitted from futures markets to physical raw material channels. • Inventory: Still trending downward; however, SMM recently adjusted its statistical methodology, rendering historical inventory data incomparable with new metrics over the long term. • Demand: LFP batteries and energy storage systems (ESS) continue to provide robust support—demand has not collapsed structurally to a degree sufficient to explain current inventory drawdowns. L1’s Strongest Counterpoint: Supply is recovering: China’s lithium carbonate output is expected to rise significantly in September; supply elasticity remains intact. Thus, it is inaccurate to state “supply shortage has been confirmed”; instead, we say: “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: High futures volatility; open interest (OI) has not shown sustained strengthening; warehouse receipts have not persistently collapsed. Conclusion: L1 strength exceeds L2 strength—market participants have not yet fully priced in long-term supply shortages. IX. L3 ·博弈 Layer (Game-Theoretic Layer) Current Status: Moderately bullish, but unconfirmed. The critical question is: How much marginal supply will high lithium prices reactivate? Key areas to monitor: Shutdowns at high-cost mines, new project developments, overseas projects, and policy-sensitive capacity. Currently, warehouse receipts are not declining continuously—there is insufficient evidence to confirm delivery-grade material scarcity or a short squeeze. 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, focus on tracking evolving conditions (current status: S2). • Bullish narrative: Demand growth + inventory drawdown + strong raw material pricing + delayed realization of effective supply. • Bearish narrative: High lithium prices stimulating restarts + new project ramp-ups + potential inventory re-accumulation. Conditions to Await: Inventory continues falling even after supply recovers. • If met → S2 upgrades to S3 (structural shortage). • If not met (supply recovery → inventory re-accumulates) → downgraded to S1 (overcapacity cleanup / cyclical rebound). Company Stratification: Companies are no longer categorized simply as “bullish” or “bearish”, but assessed across five dimensions: lithium-price sensitivity × cost advantage × production ramp-up execution × balance-sheet strength × capex risk. Category Representative Companies Positioning / Characteristics Mature, Low-Cost Resources Ganfeng, PLS, SQM Most directly benefit from rising lithium prices

Surging 170%! A-list A-share lithium battery giant reignites again.

In the first nine months of 2025, domestic energy storage battery sales reached 21.1 GWh, up 66% year-on-year; export volume stood at 7.1 GWh, surging 110% year-on-year. In the first three quarters of 2025, China’s energy storage battery shipments totaled 43.0 GWh—already exceeding 2024’s full-year volume by 30%. Shipments in Q3 alone hit 16.5 GWh, up 65% year-on-year. Lithium battery materials collectively rose in price, making sharp stock price gains for lithium battery companies inevitable. Take Li Liangbin, who recently grabbed headlines: the company he founded—Ganfeng Lithium—has seen its share price go absolutely wild over recent months. In April, Ganfeng’s share price dipped below RMB 28; more recently, it surged to RMB 75—representing a staggering ~170% gain in roughly six months. Ganfeng Lithium’s core businesses span upstream lithium resource development, midstream lithium compound processing and metallic lithium smelting, and downstream lithium battery manufacturing and comprehensive recycling of retired lithium batteries—forming a vertically integrated lithium ecosystem. When discussing Ganfeng Lithium, Tianqi Lithium inevitably comes up—it is frequently compared side-by-side with Ganfeng. In April, Ganfeng’s lowest share price was RMB 25.57; on November 18, it peaked at RMB 63.67—the highest intrayear level—marking an approximate 150% gain, slightly less than Ganfeng’s 170% surge. Over the past several months, solid-state batteries have become a major thematic driver on the A-share market. Perhaps because Ganfeng had already established downstream solid-state battery operations, its stock outperformed peers. Buyers at peak prices risk getting stuck holding the bag. Although Ganfeng’s share price has soared this year, its current level—around RMB 70—is still down over 55% from its all-time high of RMB 158. This underscores how wildly speculative the lithium and new-energy sector was during prior frenzies—leaving many investors who bought near peaks still trapped today. We note that, alongside recent sharp rallies in lithium battery material and lithium mining stocks, news periodically surfaces about certain mines halting operations—triggering supply contraction concerns. Should such reports intensify, they would likely further fuel stock price gains. Yet caution is warranted: when such “catalyst” news emerges after stocks have already rallied sharply, it often marks a psychological market top—followed by a correction. Investors either disbelieve—or believe early. Believing late, buying high, and then hoping to “hold through” (‘ge ju’) often turns small profits into small losses—and small losses into large ones. Recall how mutual fund investors got caught at the top in 2021. After three years of explosive gains (2019–2021), phrases like “golden decade,” “inevitable megatrend,” and “boundless frontier” saturated analyst reports. Some investors kept plugging future earnings projections from research reports into calculators—concluding valuations were “low” and “highly attractive”—reinforcing their conviction to buy heavily at elevated levels. Little did they realize those massively appreciated new-energy stocks had already priced in years—if not decades—of future growth. Then came intensified industry competition, brutal price wars, and frequent announcements of overcapacity—triggering steep stock price declines.