(Yicai) April 24 -- Tianqi Lithium's shares plunged by their daily trading limit after China's largest lithium miner said it expects to have had a net loss of up to CNY4.3 billion (USD593.5 million) in the first three months of the year due to fluctuations in the lithium market.

Tianqi Lithium [SHE: 002466] sank 10 percent to CNY40.63 (USD5.61) a share as of 1.38 p.m. in Shenzhen today. Its Hong Kong-traded stock [HKG: 9696] tumbled 18.9 percent to HKD28.60 (USD3.65).

Net loss was likely between CNY3.6 billion and CNY4.3 billion in the three months ended March 31, compared with a net profit of CNY4.9 billion a year earlier and a loss of CNY800 million (USD110.6 million) the prior quarter, Tianqi Lithium said late yesterday.

The Shenzhen Stock Exchange issued a document requiring Tianqi Lithium to quantitatively analyze why its expected first-quarter net loss has surged from that in the previous three months and illustrate whether there will be a risk of continuous losses.

The price of lithium carbonate has been at a low level this year, dropping to CNY100,000 (USD13,800) per metric ton from a high of CNY600,000 (USD82,810) per metric ton in 2022. Chengdu-based Tianqi Lithium's net profit was CNY24.1 billion (USD3.3 billion) in 2022.

Moreover, the ruling over SQM's tax disputes will likely cut around USD1.1 billion from the first-quarter net profit of the Chilian miner, in which Tianqi Lithium has invested, so its investment returns also plunged compared with a year ago.

In December 2018, Tianqi Lithium bought a 24 percent stake in SQM for USD4 billion. The Santiago-based company operates the Atacama lithium brine project, which boasts the world's biggest lithium reserves. 

The court in Chile's capital ruled this month on SQM's taxes-related litigation in 2017 and 2018, the firm said recently. Based on Tianqi Lithium's stake in the company, it lost around USD260 million last quarter because of the ruling.

The Shenzhen bourse also required Tianqi Lithium to specify details and future progress regarding the ruling over SQM's tax disputes and to illustrate corresponding impacts on its first-quarter net profit and relevant evidence.

Editor: Martin Kadiev