Ganfeng Lithium, the world’s largest producer of lithium metal, has issued a strong profit forecast for the first quarter of this year as soaring demand for electric vehicles (EVs) and energy storage system (ESS) batteries lifted earnings.

The company, based in China’s central Jiangxi province, said in an exchange filing on Thursday that increasing orders had driven up prices of lithium – a key material for EV and ESS batteries – helping it post an estimated profit of 1.6 billion yuan (US$234 million) to 2.1 billion yuan in the three months to March, compared with a net loss of 360 million yuan a year earlier.

“Benefiting from the rapid development of the global renewable energy industries and strong demand for lithium salts from downstream customers, selling prices of the company’s products jumped from the same period last year,” said Ganfeng – dual listed in Hong Kong and Shenzhen – in the filing. “A sustainable growth in EV battery and ESS businesses has resulted in a hefty gain in both production and sales.”

The performance was in line with Ganfeng’s expectation. Its executives, including president Wang Xiaoshen, told an investors’ conference on March 31 that the global decarbonisation drive had created a strong and sustainable trajectory for the company.

The global energy shock arising from the Middle East conflict could further fuel Ganfeng’s growth this year as more consumers pivot away from petrol vehicles to EVs amid fears of higher fuel bills, according to analysts.

“Big players are the top beneficiaries of a sudden jump in demand,” said Ivan Li, a researcher at Loyal Wealth Management in Shanghai. “As a market leader, Ganfeng’s expanded manufacturing capacity will help it secure more orders for lithium products.”