In the first half of 2026, the company's potassium chloride sales grew about 26% and lithium carbonate sales about 90%. Lithium carbonate sales grew much faster than potassium chloride, mainly because the company acquired a 51% stake in Minmetals Salt Lake for 4.605 billion yuan, with the deal closing at the end of January 2026; at the same time, the 40,000-ton-per-year integrated base lithium salt project reached full production, lifting total lithium salt capacity from about 40,000 tons a year to 98,000 tons a year (Lanke Lithium + Minmetals Salt Lake + the new project).
Lithium carbonate prices rebounded sharply, from about 120,000 yuan a ton at the end of 2025 to over 180,000 at this year's peak — a rebound of more than 50%. Salt Lake Co.'s average lithium carbonate selling price in the first half was about 143,000 yuan a ton, while unit cost was only about 24,000 yuan a ton, for a gross margin of 83.46% — the price increase almost entirely turned into profit. The potash business, meanwhile, provides steady cash flow that helps the company ride out lithium downturns.
Second, lithium prices pulled back and supply-demand expectations were revised, pressuring the stock. The company's Q2 potassium chloride sales were about 918,000 tons, down noticeably from 1.33 million tons in Q1; Q2 lithium carbonate sales were about 22,300 tons, below the estimated Q2 output of about 29,900 tons — some of the new capacity turned into inventory. On September 3, SMM broadened its inventory statistics (adding traders, battery makers, and sources like lithium from aluminum dross/tungsten slag), and inventory data was revised up in one go from over 70,000 tons to 169,300 tons. With the wider scope, visible inventory rose noticeably, weakening the market's view of low inventories and tight spot supply. In early September, battery-grade lithium carbonate spot was still at 156,000 yuan a ton; by mid-October the main futures contract had fallen below 110,000 (down 11.79% in a single day on October 12), a drop of over 25%–30%. At the same time, peak-season "Golden September" demand came in below expectations.
Third, cost control is real strength. For a resource product where you can't control the selling price, cost is the most important factor in a company's competitiveness. The Qarhan Salt Lake covers 5,856 square kilometers, and Salt Lake Co. holds mining rights to about 3,700 square kilometers of it; its potassium chloride reserves account for about 97% of the country's proven reserves, and its lithium chloride, magnesium chloride, and sodium chloride reserves also rank first nationally. Holding large mining areas creates a high resource barrier to entry. Technically, the feedstock for lithium extraction is the old brine (tail liquid) left after potassium extraction, obtained at almost zero cost — equivalent to the potassium chloride business having already borne most of the brine-pumping and solar-evaporation costs, reducing the cost of lithium extraction.
For comparison: Salt Lake Co. (Qarhan) has an all-in cost of roughly 31,000–35,000 yuan a ton, the lowest tier among domestic listed companies; Zangge Mining (also in Qarhan) is about 35,000–42,000, slightly higher — Huxiu says Salt Lake is about 4,000–5,000 yuan a ton lower; Jiangxi lepidolite producers (Yongxing Materials and others) are 50,000–70,000, about 60%–100% higher; and those buying spodumene concentrate (some of Ganfeng/Tianqi's capacity) are 60,000–80,000+, about double. As a cross-check, Zangge Mining disclosed that its average lithium carbonate sales cost in the first half of 2025 was about 41,500 yuan a ton, while its selling price was only 67,500, pushing gross margin down to 30.53%; Salt Lake Co., in the same salt lake with similar processes, still keeps its cost a step lower — enough to show its competitiveness.
The first time I sensed a lithium battery material shortage came from two pieces of information:
✅ CATL massively expanded production in 2025, adding 96GWh of new capacity for the year, with capacity utilization as high as 96.9%.
✅ Feedback from procurement said raw material supply was continuously tight, and the industry shifted from overcapacity to a supply-demand squeeze.
And CATL's recent moves (hiring the former chairman of Zijin Mining and setting up a 30 billion yuan resource platform to lock in lithium/cobalt/nickel globally) make the raw material shortage a done deal—you can feel CATL's nervousness through the screen; the supply gap must be huge.
Following this logic, I looked into raw material price changes and lithium battery demand for the next two years, and found many materials could face shortages.
First, let's look at the jump from the lowest prices of core lithium battery materials in 2025 to April 2026:
Battery-grade lithium carbonate: 59,000 yuan/ton → 170,000–174,000 yuan/ton; increase: 188%–195%;
LFP cathode: 30,000–31,000 yuan/ton → 50,000–55,000 yuan/ton; increase: 61%–83%;
Anode graphite: 27,500 yuan/ton → 43,000 yuan/ton; increase: 56.4%;
6μm lithium battery copper foil: 17,000 yuan/ton → 21,000–23,000 yuan/ton; increase: 25%–35%;
Conventional LFP electrolyte: 17,500 yuan/ton → 29,000–31,000 yuan/ton; increase: 65%–75%;
Battery-grade PVDF: 48,500 yuan/ton → 60,000 yuan/ton.
I looked into a leading chemical company, and I found that the turning point for the chemical cycle has also arrived. Let's discuss how the chemical cycle will play out. First, a disclaimer: these are personal views for reference only and do not constitute any investment advice.
The company's first-half revenue was 119.316 billion yuan, up 31.26% year-on-year; net profit attributable to shareholders was 10.063 billion yuan, up 64.35% year-on-year. In the second quarter alone, net profit attributable to shareholders was 6.345 billion yuan, up 70.66% quarter-on-quarter and 108.65% year-on-year.
This company is the largest, lowest-cost, and most transparent in the industry. Its semi-annual report is the first real trace of this chemical cycle on a leader.
Next, I'll talk about four things: first what happened at this company, then what it means for the whole industry.
First, prices reversed for the first time after four years of decline. Polymeric MDI was about 14,200 yuan per ton at the start of the year and 18,467 yuan in early September. The company's disclosed first-half average prices are even more telling: pure MDI at 21,600 yuan per ton, up 29.34% year-on-year; TDI at 16,300 yuan, up 31.45%; polymeric MDI at 16,500 yuan, basically flat. Two of the three products rose by 30%, so the price center for the polyurethane line has indeed lifted.
There's a framework for judging whether a cycle is real: prices lift off the bottom while production, sales, and exports all expand together—all three must appear at the same time for a cycle to start. If only prices rise, it's stockpiling; if only sales rise, it's selling at low prices. This company saw both volume and price rise in the first half, and exports expanded too. All three appearing together at the first chemical leader to report semi-annual results is the first signal at the industry level.
Looking at current prices alone is useless; you have to put them back into history to make sense. The same 18,000 yuan per ton polymeric MDI was the halfway point of a crash in 2018, the floor after two years of grinding last year, and this year it might be the first step of a reversal—same number, completely different situation.
The previous cycle started in the first half of 2016, when polymeric MDI fell to 9,850 yuan and the whole industry was losing money. By September 2017, it peaked above 40,000 yuan; the company's net profit attributable to shareholders jumped from 3.679 billion yuan to 11.135 billion yuan. The second phase was from the second half of 2020 to March 2021, when prices surged from 10,750 yuan to 27,750 yuan, more than doubling in less than a year, and profits hit the highest point in the company's history, which hasn't been surpassed to this day.
Two things repeated in both cycles: the bottom was always where the whole industry was losing money; and the start was always tied to an unexpected supply disruption—in 2017, supply-side reform cleared out outdated capacity; in 2021, the Texas cold snap shut down overseas plants. Why does the bottom always wait until the whole industry is losing money? Because only when losses are unbearable will capacity truly exit.
Measuring against these two rulers, current chemical prices are just lifting off the bottom, the industry has just crawled out of losses, and permanent shutdowns in Europe have only just begun. This looks more like mid-2016.
Second, a structural change on the cost side has already happened. After the ethane retrofit was completed, ethane costs have been falling all the way. The second-quarter average price was 21 cents per gallon, down 15% year-on-year. This cost advantage is long-term and structural; peers still using naphtha have costs one layer higher than this company.
