HK Stock Market Move | Lithium prices are falling and lithium companies are under continued pressure. Ganfeng Lithium Group (01772) and Tianqi Lithium Corporation (09696) both fell by 4%.

Lithium stocks fell today, as of the time of writing, Ganfeng Lithium Group (01772) fell by 4.06% to 19.38 Hong Kong dollars; Tianqi Lithium Corporation (09696) fell by 3.85% to 23.7 Hong Kong dollars. On the news front, in the first quarter of 2025, the average prices of lithium carbonate and lithium hydroxide were 75,800 yuan/ton and 70,200 yuan/ton respectively, with year-on-year declines of 25.4% and 21.4% respectively, and month-on-month declines of 0.5% and an increase of 3.0% respectively. Tianfeng pointed out that due to the decline in lithium prices, lithium companies continue to face pressure in operations, with a net profit attributable to shareholders of 5.5 billion yuan in 2024, a year-on-year decrease of 1.0%. Net profit attributable to shareholders in the first quarter of 2025 was 22.7 billion yuan, with a slight recovery month-on-month. The net profit margin for sales in 2024 was 5.7%, a year-on-year decrease of 0.7 percentage points. The net profit margin for sales in Q1 2025 was 9.0%, an increase of 7.2 percentage points year-on-year and an increase of 11.2% month-on-month. Both gross profit margin and net profit margin in Q1 2025 have shown a slight recovery. Guotai Haitong pointed out that the supply side is currently severely backward, making it difficult to ship, resulting in continued accumulation in inventory; the transaction base price has risen, and due to the difficulty in replenishing stock, downstream purchasing demand remains strong, gradually becoming reluctant to sell; some manufacturers planning to resume work and production after maintenance in April have seen a slight increase in capacity utilization, while some high-cost small and medium-sized manufacturers may continue to passively clear inventory. At present, the lithium carbonate market still lacks driving factors for a rebound, and short-term lithium prices may fluctuate at a low level. It is still necessary to closely monitor whether there are signs of recovery in downstream demand in the future.