Lithium prices are at multiyear lows due to oversupply. The issue is driven by supply growth. Demand is growing at a mid-teens percentage, due to higher global electric vehicle sales and the buildout of energy storage systems. However, a wave of new supply exceeded demand growth driving prices down.
Despite a decline in the lithium price this year, lithium demand will remain resilient, driven by vehicle electrification. Ganfeng's cost advantage over higher-cost new supplies, will be enhanced in the long term.
Bears
Decrease in the price of the lithium mines or lithium compounds will significantly affect Ganfeng’s profitability, resulting in significant decline and volatility in earnings forecast.
Founded in 2000, Ganfeng is the world’s third largest and China’s largest lithium compounds producer and the world’s largest lithium metals producer in terms of production capacity. The company offers five major categories of more than 40 lithium compounds and metals products, which is one of the most comprehensive product offerings among the suppliers globally. Starting as a midstream manufacturer of lithium compounds and lithium metals, Ganfeng has successfully expanded into a vertically integrated business model with operations along the critical stages of the industry value chain, including upstream lithium extraction, midstream lithium compounds and metals processing, and downstream lithium battery production and recycling.