(Yicai) July 12 -- Eleven out of 14 Chinese producers of lithium, a key material used in electric vehicle batteries, that have already released their first-half earnings recorded poorer profitability amid dropping product prices.

Tianqi Lithium recorded the highest loss among the 14 firms at CNY4.9 billion to CNY5.5 billion (USD671.8 million to USD761.2 million), according to the Chengdu-based mining company's interim report. In the first half of last year, it was still profitable at CNY645.3 million (USD88.8 million).

Another big lithium miner, Ganfeng Lithium Group, expects to record a loss of CNY760 million to CNY1.3 billion (USD104.8 million to USD179.2 million), compared to a profit of CNY585 million a year ago.

Both companies said that the sustained decline in the prices of lithium salts and lithium battery products is the primary reason for the significant slumps. Additionally, it is getting harder to explore lithium resources abroad, they added.

Not all were as unlucky as certain firms, such as Tibet Summit Resources, Tibet Mineral Development, and Jinzhou Yongshan Lithium, were able to increase their profits, thanks to their diversified business structures.

Gains of many up to mid-stream firms were contracting though. For instance, Tinci Materials Technology is forecast to report a net profit of CNY210 million to CNY260 million in the first six months of the year, down as much as 84 percent. Ningbo-based Shanshan predicts an up to 99 percent decline in net profit to CNY15 million to CNY22.5 million (USD2.1 million to USD3.1 million).

Industry insiders explained that some of the factors that put pressure on lithium companies were the fluctuating prices of raw materials, intensifying competition, and slowing growth in demand. However, as production capacity increases, unit costs are expected to decrease, and some lithium battery companies that lack their own mineral resources will be phased out, they added.

The price of battery-grade lithium carbonate was quoted at CNY89,700 (USD12,359) per ton yesterday, marking a two-year low, according to data from the Shanghai Metals Market.

Editor: Emmi Laine