Lithium producers from China to Australia have posted bumper profits as demand from the fast-growing energy storage sector boosted prices for the battery metal.
Major Chinese producers Tianqi Lithium Corp. and Ganfeng Lithium Group Co. each reported their strongest net income in three years for the first half of the year, with the former forecasting a tight market for the rest of 2026 due to increasing demand and “disruptive factors” for supply.
China’s globally-watched spot price for the battery material surged 22% over the first half as energy storage emerged as a meaningful demand source due to the growth of data centers and renewable power. This comes after the lithium market had been volatile for several years due to a rapid build-out of supply.
US-headquartered Albemarle Corp. said global lithium demand grew 45% through May from a year earlier, outstripping supply growth. Australia’s PLS Group, which swung to a A$526 million ($377 million) profit in the 12 months to June 30 from a loss the year before, was equally bullish on prices for the coming months due to a forecast shortfall.
Inventories of the battery material held by industry players in China are declining, suggesting tightness in the market. Zijin Mining Group Co. said in its earnings report that there’s room for prices to rise further in the short term.
“Overseas supply may be affected by policy and logistics, and some production restarts will take time for actual supply to return to the market,” Tianqi officials said in an earnings call, according to the transcript.
Chile’s SQM raised its production guidance for this year, while China’s Chengxin Lithium Group Co. unveiled plans to spend more than $476 million building lithium-sulfate plants in Zimbabwe and Nigeria.
Still, the current price rally may face a reckoning in the longer term. UBS Group AG last week downgraded its forecast for lithium prices by 5-35%, believing the market will flip to surplus next year.
“Fundamentals are tight, and primed in our view for a price rally,” in the second half of the year, UBS analysts wrote in a note dated Aug. 24. “But further out, we do now see faster supply growth than demand from 2027.”
Jefferies said the current month-on-month increase in battery production scheduling was an indication of solid demand.
“Supply expansions/ restarts are happening, but since it takes some time to hit the market, it is something we worry less about in second-half 2026 than in 2027. However, expectations might walk ahead of the spot market,” Jefferies analyst Shuhang Jiang said in a note Friday.
More stories like this are available on
©2026 Bloomberg L.P.