China's Ganfeng sees first-half profit halve amid lithium price slump

BEIJING, Aug 25 (Reuters) - Ganfeng Lithium , one of the world’s top lithium producers, said on Tuesday its net profit almost halved in the first six months of 2020 as prices for the commodity used in electric vehicle batteries continued to slump.

The Chinese company’s net income reached 156.49 million yuan ($22.6 million) in January through June, down 47.1% from the same period a year earlier, it said in a filing to the Shenzhen Stock Exchange, adding that the coronavirus had affected its performance and the whole lithium industry.

“Except for the temporary suspension of (some) production lines in February 2020 due to the epidemic, the company has tried its best to meet the order needs of customers,” it said.

Ganfeng, which makes battery-grade chemicals such as lithium carbonate and hydroxide and counts automaker Tesla Inc among its clients, said half-year revenue was down 15.4% at 2.39 billion yuan, saying this was mainly due to the downward trend of the lithium salt market and the drop in prices.

Lithium carbonate prices in China AM-995C-LTCB, as assessed by Asian Metal, are down around 20% this year to near their lowest in seven years, having been in freefall since 2018 amid oversupply.

Ganfeng, whose rival Tianqi Lithium Corp is due to report half-year results on Wednesday, said last week it would take over operation of lithium production lines belonging to smaller companies from October this year until March 2023 in return for paying a management fee.

The lines can produce a total of 25,000 tonnes of lithium carbonate per year, as well as 5,000 tonnes of hydroxide, Ganfeng said.

$1 = 6.9120 Chinese yuan renminbi Reporting by Tom Daly and Min Zhang Editing by David Holmes