Tianqi Lithium Corp. and Ganfeng Lithium Group, China’s two biggest lithium producers, just delivered first-half numbers that are almost hard to believe. Tianqi posted net income of 4.24 billion yuan, a surge of 4,925% from a year earlier, while Ganfeng swung from a 500 million yuan loss to a 4.26 billion yuan profit. The reason is straightforward: battery-grade lithium carbonate prices jumped more than 130% in the first six months of the year.
The rally was not a straight line. Prices started January near 120,000 yuan per tonne, climbed to a peak of 200,500 yuan on May 13, then pulled back to 156,500 yuan by the end of June. The first-half average was about 163,400 yuan. For miners that own their own ore, the math was especially favorable — they did not have to buy expensive feedstock on the open market, so most of the price gain flowed straight to the bottom line. Ganfeng’s gross margin hit 64%.
Demand exceeded expectations across both power batteries and energy storage. Global storage cell shipments surpassed 460 gigawatt-hours in the first half. At the same time, supply kept hitting snags: Zimbabwe temporarily banned lithium concentrate exports, a diesel crisis in Australia constrained mine output, and permit reviews in Jiangxi province raised the specter of tighter domestic supply. Those disruptions came after two years of brutal industry consolidation that forced high-cost mines offline, leaving the supply side far less flexible than in past cycles.
What makes this rebound different is where the demand is coming from. Lithium is no longer a one-engine story built on electric vehicles. Energy storage has become the second engine, and some industry participants expect it to overtake EVs as the largest source of lithium demand as soon as 2026. Global storage installations are projected to reach 455 GWh this year, up 40% from 2025. US data center construction is pulling in large-scale storage orders. Higher natural gas prices in Europe are reviving residential storage. Emerging markets are rolling out new storage incentives.
AI data centers are the strongest incremental force. In the first five months of 2026, global shipments of storage batteries for AI data centers topped 10 GWh, already exceeding all of 2025. Full-year shipments are forecast to reach 30 GWh. Because these projects overwhelmingly favor lithium iron phosphate chemistry, lithium demand now tracks storage installations almost one for one.
Albemarle Corp. confirmed the tightness. The world’s largest lithium producer reported second-quarter revenue up 31% and adjusted EBITDA up 155%, with its energy storage chemicals segment growing nearly 80%. Chief Executive Officer Kent Masters said storage demand was the main driver, and the company raised its 2026 forecast for stationary storage battery production to 900–1,100 GWh. UBS also lifted its outlook, projecting global lithium demand will grow 16% to 1.97 million tonnes of lithium carbonate equivalent in 2026, with storage batteries accounting for 17% of that total and expanding 60% year on year. UBS raised its average price forecast for Chinese lithium carbonate by 18% to 200,000 yuan per tonne.
The debate is whether this can last. Lithium has already given back more than 20% from the May peak, and expectations of supply recovery are building. The long-term math has not changed: lithium is not scarce, and high prices eventually bring new mines and new capacity online. In 2022, when prices hit 600,000 yuan per tonne, the market declared lithium “the next oil.” Two years later, when prices crashed below 100,000 yuan, the consensus flipped to permanent oversupply. Now storage demand is forcing a repricing, and China’s top miners are printing money. Whether that marks the start of a new supercycle — or another boom that sows the seeds of its own reversal — will depend on how quickly supply returns and whether storage demand keeps translating into real purchases.
