By Jiahui Huang

Chinese lithium producers' shares fell following forecasts for sharp profit declines in 2023, indicating that slower demand growth from battery and electric-vehicle makers extended into the year's final quarter.

The Hong Kong-listed shares of Ganfeng Lithium were down 3.9% at 21.15 Hong Kong dollars (US$2.70) at midday Wednesday, widening year-to-date losses to 28%. Its Shenzhen-listed shares fell 5.3% to 35.01 yuan (US$4.89).

Tianqi Lithium's H-shares dropped 2.9% to HK$35.55, while its Shenzhen-listed shares shed 5.3%.

Both companies said late Tuesday that they expect to post steep drops in profit amid lower selling prices of lithium products and weakening profit margins.

Ganfeng Lithium expects 2023 net profit to drop 70% to 80%, widening from its 59% drop in bottom-line results through the first nine months of the year. Tianqi forecast a full-year profit decline of 63% to 73%, widening from the nine-month decline of 49%.

At the bottom end of those ranges, both companies would post net losses for the fourth quarter.

Prices of lithium chemical dropped significantly in 2023 due to slower demand growth from battery and EV makers, which dragged on both companies' gross profit margin.

Most recently, Tianqi and joint venture partner IGO agreed to change their pricing mechanism for the Greenbushes lithium mine in Australia, the world's largest hardrock lithium mine in operation.

The new pricing setting will reduce the production cost of the Greenbushes operation. Tianqi's businesses are likely to benefit from the change, Nomura analysts led by Ethan Zhang said.

Write to Jiahui Huang at

(END) Dow Jones Newswires

01-31-24 0044ET