Ganfeng Lithium's Argentina Mariana Salt Lake Lithium Project Phase I Officially Commences Production, with Total Lithium Resources of Approximately 8.12 Million mt LCE

SMM, February 17: Recently, Ganfeng Lithium announced that its wholly-owned subsidiary, Litio Minera Argentina S.A., held a commissioning ceremony for Phase I of the Mariana Lithium Salt Lake Project in Argentina on February 12, 2025, local time, marking the official commencement of production. According to the announcement, the Mariana Lithium Salt Lake Project is located in Salta Province, Argentina, with an explored lithium resource of approximately 8.121 million mt LCE. After the official commissioning of the Phase I production line with an annual capacity of 20,000 mt of lithium chloride, the company is expected to accelerate the capacity ramp-up progress of the project. As capacity gradually ramps up, the company will further optimize its lithium resource supply and cost structure, enhance profitability, and continuously strengthen its core competitiveness in the global market. In late January, Ganfeng Lithium also released its 2024 performance forecast, stating that the company expects a net profit attributable to shareholders of publicly listed firms to record a loss of 1.4-2.1 billion yuan, down 128.30%-142.45% compared to the same period in 2023, when it achieved a profit of 4.947 billion yuan. Explaining the reasons for the performance changes, Ganfeng Lithium stated that fluctuations in lithium product prices significantly impacted the value of its financial assets during the reporting period, showing a downward trend compared to the beginning of the period. Among these, the stock price of Pilbara Minerals Limited (PLS) experienced a particularly significant decline, directly resulting in substantial fair value losses of approximately 1.64 billion yuan. To address this situation, the company actively implemented risk management measures, utilizing collar option strategies to hedge against the risk exposure caused by PLS stock price fluctuations. This strategy partially offset the fair value losses caused by the sharp decline in PLS stock prices. Additionally, during the reporting period, the lithium product market's volatility led to a decline in the selling prices of lithium chemicals and lithium battery products. Although shipments increased YoY, the company's operating performance declined significantly YoY. Furthermore, the company made asset impairment provisions for inventories and other related assets in accordance with accounting standards, resulting in a significant YoY decline in net profit. Regarding lithium chemical prices, SMM historical data shows that "oversupply" was undoubtedly a defining feature of the lithium market in 2024. Against this backdrop, lithium carbonate prices, despite occasional increases at the beginning of 2024 due to temporary supply tightness, fell to a three-year low of 72,250 yuan/mt on September 9, 2024, after supply recovered. This marked a decline of 495,250 yuan/mt from the peak of 567,500 yuan/mt, a drop of 87.27%. As of December 31, 2024, the average spot price of battery-grade lithium carbonate was 75,050 yuan/mt, down 21,850 yuan/mt from 96,900 yuan/mt on December 29, 2023, representing an annual decline of 22.55%. On a YoY basis, the average spot price of lithium carbonate in 2024 also saw a significant decline compared to 2023. According to SMM spot quotes, the average price in 2024 was 90,509 yuan/mt, compared to 258,794 yuan/mt in 2023, a YoY decrease of 168,285 yuan/mt, or 65.03%. Entering 2025, in early January, the lithium carbonate market saw relatively active inquiries and transactions, driven by numerous favorable market news and pre-holiday inventory buildup sentiment among some downstream enterprises. Additionally, upstream smelters, under sustained cost pressure, maintained a strong sentiment to stand firm on quotes for 2025 long-term contract discount coefficients and spot cargo. The relatively low inventory levels at upstream smelters and minimal shipment pressure also supported price increases. Meanwhile, traders raised prices in response to active procurement periods among downstream buyers, leading to a price increase in early to mid-January. However, after the Chinese New Year, spot lithium carbonate prices weakened. As of February 17, the spot price of battery-grade lithium carbonate fell to 75,200-77,000 yuan/mt, with an average price of 76,100 yuan/mt, down 1,800 yuan/mt from 77,900 yuan/mt on January 21, a decline of 2.31%. 》Click to view SMM metal spot quotes According to an SMM survey, current market transactions show that downstream material plants, having built sufficient inventories before the Chinese New Year, exhibited relatively weak purchasing intentions post-holiday, with only some just-in-time procurement transactions. Overall, the market sentiment remains cautious and observant. Upstream lithium chemical plants continue to stand firm on quotes for 2025 long-term contract discount coefficients and spot lithium carbonate. Overall, the spot lithium carbonate market remains sluggish, dragging prices downward. On the supply side, some upstream lithium chemical plants have completed production line maintenance, with production gradually returning to normal levels. On the demand side, downstream production continues at the pre-holiday pace, but cathode material production remains on a downward trend in February, following January's reduction, due to the off-season. Overall, February is expected to see a significant inventory buildup of lithium carbonate in China. In the medium and long term, Ganfeng Lithium remains optimistic about lithium market demand. The company expects that marginal improvements in future demand will stabilize lithium carbonate prices, and market competition will gradually become more rational. With an integrated strategic layout across the lithium battery industry chain, the company anticipates that its lithium chemical and lithium battery businesses will benefit from the rapid development of the lithium battery industry. Against the backdrop of a significant YoY decline in lithium carbonate prices, many lithium chemical-related companies are expected to report varying degrees of performance declines in 2024. Tianqi Lithium, often referred to as one of the "Lithium Battery Twins" alongside Ganfeng Lithium, previously announced an expected net profit attributable to shareholders of publicly listed firms to record a loss of 7.1-8.2 billion yuan in 2024, compared to a profit of 7.297 billion yuan in the previous year. Explaining its performance changes, Tianqi Lithium also cited the significant decline in lithium prices during the reporting period. Despite achieving YoY and QoQ growth in production and sales volumes of lithium compounds and derivatives in 2024 and Q4 2024, the overall market price of lithium products declined sharply during the reporting period. This led to a significant YoY decline in the selling prices and gross margins of lithium products. Additionally, the mismatch in timing between the pricing mechanisms of chemical-grade lithium concentrates from its subsidiary Talison Lithium Pty Ltd (Talison) and the company's lithium chemical product sales pricing mechanisms resulted in a temporary loss in operating performance during the reporting period. As the market price of chemical-grade lithium concentrates gradually declined in 2024, the procurement price of lithium concentrates from Talison also decreased accordingly.

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Ganfeng Lithium's Argentina Mariana Salt Lake Lithium Project Phase I Officially Commences Production, with Total Lithium Resources of Approximately 8.12 Million mt LCE

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