As the industry debates whether lithium carbonate prices can hold above the critical 100,000 yuan per ton threshold, Tianqi Lithium Corporation has delivered an explosive performance forecast that shatters expectations. The company anticipates a net profit of 17 to 20 billion yuan for the first quarter of 2026, representing a staggering year-on-year increase of over 15 times. This single-quarter profit nearly equals four times the company's entire earnings for the previous year, signaling not just recovery but a powerful rebound.
Following two years of severe downturn, the global lithium giant is demonstrating remarkable resilience, indicating a strong reversal in the industry cycle. The core driver behind Tianqi Lithium's performance surge is the comprehensive recovery of lithium product prices. Battery-grade lithium carbonate began the year averaging 117,000-119,000 yuan per ton, then surged rapidly in January due to adjustments in battery export tax rebate policies and pre-emptive export activities, briefly exceeding 180,000 yuan per ton in late January. After some correction in February, prices stabilized in the 150,000-170,000 yuan range, resulting in a cumulative increase of approximately 28% for the quarter. By mid-April, spot market prices remained firm at 160,000-170,000 yuan per ton.
This price rebound reflects a fundamental shift in supply-demand dynamics. Lithium carbonate prices had previously hit a cyclical low of 75,000 yuan per ton in 2025, with the industry suffering from severe overcapacity. However, the global lithium market is transitioning from significant oversupply to tight balance or even slight shortage in 2026. Institutional forecasts project global lithium demand at 1.94-2.04 million tons LCE (lithium carbonate equivalent) for 2026, representing 14%-27% year-on-year growth, while effective capacity growth is estimated at 20%-25%, creating a supply gap of 20,000-110,000 tons LCE.
More importantly, the demand structure is undergoing qualitative transformation. Data shows that China's power and energy storage battery sales reached 437.1 GWh in the first quarter of 2026, up 52.9% year-on-year. Energy storage battery sales specifically surged 111.8% to 145.1 GWh, now accounting for 33.2% of total sales. Energy storage is replacing power batteries as the primary growth engine for lithium demand, with projections indicating it will constitute nearly 30% of total lithium demand in 2026.
Tianqi Lithium explicitly stated in its performance forecast that benefiting from multiple positive factors including new energy industry development and downstream demand growth, the average selling prices of its main lithium products have increased significantly compared with the same period last year. As the operator of the world's lowest-cost, largest hard-rock lithium mine at Greenbushes, Tianqi Lithium fully enjoys the pricing power advantages of resource dominance. The mine produced 1.353 million tons of lithium concentrate in 2025, accounting for 18.9% of global hard-rock lithium production.
Beyond its core operations, investment income from associate company SQM has become an important contributor to Tianqi Lithium's profit improvement. Through its wholly-owned subsidiary, Tianqi Lithium holds a 21.9% stake in SQM, which operates the world's largest and highest-grade Atacama Salt Flat. Using Bloomberg's earnings per share forecasts, Tianqi Lithium anticipates SQM will report substantial year-on-year growth for the first quarter of 2026, leading to significantly higher recognized investment income. SQM contributed 665 million yuan in investment income throughout 2025. With lithium price benchmarks substantially higher in the first quarter of 2026, SQM's performance elasticity could provide important stability to Tianqi Lithium's quarterly profits.
While celebrating its performance breakthrough, Tianqi Lithium is simultaneously accelerating capacity expansion. The company's controlled chemical grade plant three (CGP3) at the Greenbushes lithium mine in Australia commenced trial operations in December 2025 and produced its first qualified products on January 30, 2026, increasing total lithium concentrate capacity to 2.14 million tons annually. The domestic Yajiang Cuola spodumene project is progressing steadily, aiming to create dual resource security both domestically and internationally.
However, expansion during cyclical reversals carries inherent risks. Industry data indicates social inventories of lithium carbonate stood at 99,000-103,000 tons by late March, showing consecutive slight reductions but remaining at relatively high levels. Rising lithium prices have also stimulated supply increases, with domestic lithium carbonate production reaching approximately 104,800 tons in March 2026, up 27.1% month-on-month. Should prices remain elevated, previously idled low-cost capacity from lepidolite and salt lake operations could restart quickly, potentially suppressing prices.
Furthermore, profit distribution across the lithium产业链 is becoming increasingly polarized. Upstream lithium mining companies collectively reported strong first-quarter performances, with several major players showing substantial profit growth. Meanwhile, midstream materials manufacturers face dual pressures of rising costs and intensifying competition, while downstream battery leaders are already feeling raw material price pressures. This uneven distribution pattern may trigger rebalancing across the industry chain.
Looking ahead, the industry maintains cautious optimism. Tianqi Lithium management stated during an April 8 performance briefing that the global lithium industry will maintain a tight balance in 2026, with lithium ore supply remaining constrained in the first half due to longer development and expansion cycles compared to lithium salt processing. Industry experts project lithium prices could exceed 200,000 yuan per ton in 2026, with upward trends likely continuing through the third quarter. Under neutral assumptions, the global lithium carbonate market is expected to maintain tight supply-demand balance throughout 2026.
For Tianqi Lithium, the first-quarter performance surge not only validates its cost resilience and resource advantages during the lithium cycle bottom but also signals that companies controlling upstream resources are regaining pricing power as energy storage demand reshapes global lithium consumption patterns. As lithium carbonate prices climb from 75,000 yuan per ton depths to 180,000 yuan per ton heights, Tianqi Lithium's 1.7-2.0 billion yuan quarterly profit sends a clear market message: the lithium cycle is turning faster than anticipated.
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