Lithium giant’s $43,000 price forecast gets local mining stocks racing

Alex GluyasMarkets reporter

Nov 18, 2025 – 11.20am

One of the world’s largest lithium suppliers has set the commodity market racing after predicting that the price of the battery material could double next year amid a boom in demand for energy storage.

The comments from Ganfeng Lithium chairman Li Liangbin at an industry event have turbocharged a rally in ASX-listed miners and wrong-footed short sellers, who were betting on the market to remain challenging. Li said demand could surge 30 per cent next year and lift prices as high as 200,000 yuan ($43,000) a tonne, according to local publication Cailian.

The most traded carbonate contract on the Guangzhou Futures Exchange surged 9 per cent, closing at the upper limit of 95,200 yuan a tonne on Monday. Prices of spodumene, the type of lithium mined in Australia, rose 3.4 per cent to $US1075 a tonne, according to S&P Global Platts.

Shares in major producers SQM and Albemarle rallied as much as 14 per cent and 9.3 per cent, respectively. That spilled over to the S&P/ASX 200 on Tuesday, with PLS and Liontown Resources among the few stocks in the green. The broader sharemarket sank 1.9 per cent by the closing bell.

Lithium stocks have rebounded sharply in recent months amid rising demand for large-scale battery storage, which helps stabilise electricity grids and support the data centres that power artificial intelligence.

“This change in energy storage demand has put a rocket under the entire sector,” said Sam Berridge, the portfolio manager of Perennial’s Natural Resources Fund. “That rally has been helped along by the fact short interest in the sector was quite extreme, so a lot of those short sellers will be trying to get out while lithium prices are rallying.”

The percentage of PLS shares held by short-sellers has fallen from a peak of 18.5 per cent two months ago to now sit at 14 per cent, according to the securities regulator. The share price of the lithium producer, which was the most shorted stock on the ASX, has nearly tripled over the past six months, forcing hedge funds to cover their bets by buying up the stock.

DNR Capital’s Australian Emerging Companies Fund has profited handsomely from the rebound in lithium stocks after buying positions in several miners including PLS and Liontown earlier this year.

“The market [is] beginning to recognise the rapidly growing opportunities in stationary energy storage and the ongoing penetration of electric vehicles,” said portfolio manager Sam Twidale.

“Following several years of lithium companies cancelling expansion plans and cutting investment, we believe the resulting reduction in overcapacity could see prices normalise more quickly than the market anticipates.”

Major brokers are also rapidly recasting their lithium forecasts to account for the imminent surge in demand. Barrenjoey has been the most bullish, upgrading its spodumene price forecast for next year to a whopping $US3250 a tonne, triple the current price. Other Wall Street banks including Citi and JPMorgan have also upgraded their forecasts this month.

Morgan Stanley flagged on Tuesday that demand for electric vehicles continues to strengthen, with sales in China rising 32 per cent in October from a year earlier to a record 1.1 million units.

However, Macquarie warned clients this week that news flow surrounding the restart of Chinese battery giant Contemporary Amperex Technology’s huge Jianxiawo project could trigger a short-term reversal.

“We believe news of a potential restart could be announced in the near term. Such a development may shock the futures market, weigh on equities, presenting a profit-taking opportunity,” they wrote in a note to clients. “However, given the medium-term constructive narrative, we think this could present a buy-the-dip opportunity.”

Production at the mine has been suspended since CATL failed to get an extension on a permit that expired in early August, which kick-started the rally in lithium prices and stocks. CATL was told earlier this month it needed to pay 247 million yuan for the lithium mining rights at the project.

Macquarie flagged the earliest possible restart for CATL’s mine would be December this year, a timeline that ultimately could slip to after the Chinese New Year in February given the number of review steps required.

The broker also warned that lithium stocks are trading far above prices of the underlying commodity. PLS and Mineral Resources are trading at an implied spodumene price of $US1300 a tonne, while Liontown is even more expensive at $US1500 a tonne. The lofty valuations are deterring some fund managers such as Argonaut from beefing up their exposure to the sector.

“We’re cautious because I think the stocks have run a bit hard,” said Argonaut portfolio manager David Franklyn. “The market is factoring in spodumene at about $US1500 a tonne and probably now expecting $US2000 a tonne so the question is whether that’s reasonable.”

Major development over the weekend in global Lithium supply, with news CATL has had to suspend mining at its major Jianxiawo mine (estimated at 3% of global lithium supply) – and is likely to remain shuttered for at least a few months.

In what is a pretty immature market with volatile price-discovery, this could throw lithium market participants into a flutter, and on top of the ongoing double-digit compounding demand story – could tip the scales back into a balanced or even slight-deficit market much sooner – leading to a sustained rally in pricing back from recent super low prices.

This also follows hot on the heels from Liontown (LTR)’s major capital raising to shore up its balance sheet,- and which saw not just the government’s National Reconstruction Fund take up $50M of shares in the $266M institutional raising, and subsequently supersized to $316M to allow China’s Canmax Tech (one of the world’s largest battery chemicals makers) to also take up $50M of shares in the raise (following its inspection of the flagship Kathleen Valley mine last week).

https://www.theaustralian.com.au/business/dataroom/liontown-tipped-to-rally-after-canmax-surprise/news-story/a30d2b27b83c121794423804fdff7f8f 

Current news and Canmax’s move have all the hall-marks of a significant turning point in Lithium sentiment and positioning for higher prices and what is likely to be a more balanced market.

Throw on top massive short positions (3^rd & 4^th most shorted companies with 13-15% short) – and the resulting scramble to cover could be explosive in our listed majors (PLS & LTR) and indeed all quality hardrock & brine miners globally.

Interesting times ahead – and will be interesting to see their moves on the bourse today, and broking houses commentary over coming days.

Suspect China has belatedly realised that while its battery makers may be “winning today”, flooding the market with Lithium to suppress prices so far below incentive pricing for such a sustained period – is in fact sowing the seeds of “losing tomorrow” when raging global compounding demand for massive growth in BESS/EV ends up swamping current supply (as no one will be financing or bringing on any but the lowest cost new supply, given such sustained sub-par pricing).

ARTICLES re CATL MAJOR MINE CURTAILMENT (From Bloomberg):

CATL Suspends Output at China Lithium Mine for Three Months - Bloomberg

CATL Suspends Output at China Lithium Mine for Three Months

By Annie Lee and Alfred Cang

August 10, 2025 at 6:12 PM GMT+10

Takeaways by Bloomberg AI Hide

• CATL has suspended production at a major lithium mine in China's Jiangxi province for at least three months, according to people familiar with the matter.
• The suspension came after the company failed to extend a key mining permit which expired on Aug. 9, one of the people said.
• CATL is still in talks with government agencies to secure a renewal, but is preparing for the halt to last months, according to a person briefed on the matter.

Battery giant Contemporary Amperex Technology Co. Ltd. has suspended production at a major lithium mine in China’s Jiangxi province for at least three months, according to people familiar with the matter.

CATL, the world’s largest manufacturer of electric-vehicle batteries, has announced internally that the Jianxiawo mine would be temporarily halting operations, they said. One of the people said the suspension came after the company failed to extend a key mining permit which expired on Aug. 9.

CATL didn’t immediately respond to questions from Bloomberg outside business hours.

The lithium industry has been buffeted in recent weeks by extreme volatility in the spot, futures and equity markets, and the Jianxiawo operation has been in particular focus, given questions over its permit renewal. Last week traders flew drones over the mine, forecast to account for about 3% of the world’s mined production, in the hope of gauging the current state of output.

A second person briefed on the matter said affiliated refineries in nearby Yichun had been informed of the closure. The first person added the company was still in talks with government agencies to secure a renewal but was preparing for the halt to last months. The people asked not to be named as they are not authorized to speak publicly.

CATL’s permit trouble and suspension come as Beijing cracks down on overcapacity across a host of industries and increases scrutiny of mining operations. For an industry that has been plagued by a glut for more than two years, however, the pause in output from a significant link in the supply chain will be a boon.

CATL saw revenue from its battery mineral resources business plummet 29% in 2024, a drop that underscores challenges facing the Chinese company’s upstream investments including a precipitous decline in lithium prices. These were originally intended as a way of securing supply and managing costs, and CATL had aggressively pursued mining stakes, even overseas.

The most-active lithium carbonate futures contract touched more than 80,000 yuan ($11,128) in July on the Guangzhou Futures Exchange, which moved to rein in speculative trades afterward. The material surged around 9% last week to change hands at 75,000 yuan on Friday.

— With assistance from Jackie Cai and Chunying Zhang

(Adds detail on mining permit in paragraph two and five, CATL background in paragraph seven.)

Drones Hover Over CATL Mine as Lithium Market Anxiety Rises - Bloomberg

Drones Hover Over CATL Mine as Lithium Market Anxiety Rises

By Annie Lee and Alfred Cang

August 8, 2025 at 7:53 PM GMT+10

Takeaways by Bloomberg AIHide

• Traders have been flying drones over a lithium mine run by Contemporary Amperex Technology Co. Ltd. to gauge the state of the operation.
• The lithium sector has been experiencing extreme volatility amid uncertainty over production disruptions and rising government scrutiny.
• The mine is awaiting an extension to its mining paperwork to continue working beyond the weekend, according to traders and the company's statement to investors.

Traders have been flying drones over a lithium mine run by battery giant Contemporary Amperex Technology Co. Ltd. in the hope of gauging the state of the operation days before a key permit expires, a symptom of the acute supply anxiety that has gripped the market.

The lithium sector has been buffeted in recent weeks by extreme volatility in the spot, futures and equity markets amid uncertainty over production disruptions and rising government scrutiny. Major supply concerns include CATL’s Jianxiawo mine, forecast to account for about 3% of the world’s mined production. It is awaiting an extension to its mining paperwork if it is to continue working beyond this weekend.

Drones have been hovering above the mine to monitor its conveyor belts and potentially catch a change in its operations, according to two traders who attended a conference held this week in Yichun, China’s lithium mining hub in Jiangxi province.

Lithium Swings Amid Supply Anxiety

Prices of the battery material see heightened volatility in recent weeks

Source: Guangzhou Futures Exchange

Yichun emerged as a battery-metal hub through the boom years. Traders and analysts have been closely watching activity in and around the city, plus efforts to regulate producers there as Beijing pledges to crack down on excess supply across industries.

Read More: China’s Lithium City Shows the High Price of a Fortress Economy

The most-active lithium futures in China hit more than 80,000 yuan ($11,128) in July on the Guangzhou Futures Exchange, though it later moved to cool speculative trading. This week the material has surged around 9% to change hands at 75,000 yuan on Friday.

CATL did not immediately comment on queries emailed by Bloomberg.

The Chinese company told investors last week it had submitted an application to extend the permit. It added that the mine was operating normally.

For those long suffering investors in $PLS, at least management is showing faith in a personal and financial way.

I've got to say as an investor IRL, I can take some solace in the fact that Pilbara Minerals is striving to be the best, low-cost option in the market, even as the share price tanks and the potential for some of the smaller, capital/cash constrained companies start to capitulate.

From the Australian Resource & Investment website:

PLS boss buys $1 million in shares

By Dylan Brown

Pilbara Minerals (PLS) chief executive officer Dale Henderson has again backed his company on the open market, spending $1.01 million on shares.

According to ASX filings released on Monday, Henderson acquired 755,000 PLS shares at $1.34 each last week. The purchase follows a $1.1 million buy-up in December, when he acquired 500,000 shares at $2.23 apiece.

The move comes amid a continued lithium downturn, but Henderson’s investment appears to reflect his long-term faith in the company’s strategy and broader outlook.

“Lithium is still a young and rapidly evolving market, fuelled by technological breakthroughs, government policies, and the global shift toward cleaner energy, so short-term pricing volatility is to be expected,” Henderson told Australian Mining.

“We’re currently witnessing a rebalancing of the market with production curtailments across the sector. Pricing at its current level is unprofitable and unsustainable for the majority of raw material producers, which could potentially lead to even further cuts in production.”

The purchases coincide with PLS’ transition from a growth to optimisation phase as it ramps up its P1000 expansion project at the Pilgangoora operation in Western Australia.

“Construction of the P1000 expansion project was completed in January, marking the end of a transformational two-year investment cycle,” Henderson said.

“Ramp up is now complete and we’re entering the optimisation phase of the project with a focus on achieving higher production volumes and lower unit cost.”

The expansion lifts nameplate capacity at Pilgangoora to around one million tonnes per annum, positioning PLS for greater efficiencies when the market rebounds.

“We’re preparing our operation and business for this future state by preserving our current position and maintaining our options for future growth,” Henderson said.

Henderson’s repeated share purchases send a strong signal of confidence as PLS looks to ride out current headwinds and maintain its position as global lithium leader.

Must be feeling brave today - considering the other widow-maker trade - been on par with those calling time on CBA's unstoppable rally over the past 12 months!!

By that I'm talking about anyone trying to pick the bottom in the Australian Lithium sector (namely the two Aussie pureplay majors - Pilbara Minerals (PLS) & upcoming major Liontown Resources (LTR)). [Exposure to the cheapest & best quality mine Greenbushes would be nice - but don't fancy the idea of being a minority shareholder in JV with Tianqi through IGO, or being in the Kwinana lithium refining in Perth & trying to compete with the Chinese].

While I confess I moved too early in accumulating initial positions in both PLS & LTR - I do believe the punishment doled out to the sector has shown incredible short-termism & factoring in a very sustained dire outlook for the sector at large.

While no one can say for sure when demand will catch up with the current lithium supply & refining over-capacity - it is clear the growth rates in EVs & BESS (stationary energy storage) sectors & expert demand forecasts continue to be extraordinary. Lithium prices have been well below incentive prices for quite sometime now, and we have & should continue to see supply cutbacks (probably overall slower supply growth, but no where near enough to keep up with the rapidly expanding demand.

One has to note this against what is likely be a relatively elastic supply price response to any meaningful & sustained price kick - so not expecting any kind of massive run up in prices like we witnessed in 2022. Rather I do expect a slow & steady recovery in pricing to a level that incentivises some lower-cost lithium supply additions over time, but not enough to open the floodgates.

I think the incredible tech advancements we're seeing in battery tech (particularly Solid State batteries) will help overcome issues like range anxiety, I while Trump might be able to repel some Chinese auto supply from the US market - I really don't believe he can or will derail the increasing international uptake in EV & BESS.

So my predictions:

1) A short-term bump of up to 20% off recent lows in higher-quality Lithium stocks (seems to be happening in China's market today also), after what has been a likely been overdone negativity on the real impact of Trump's tariff threats (more likely to just divert supply to other markets & perhaps slow growth down slightly rather than stop it altogether) - as well as likely stimulus measures to be announced at this week's Chinese National People Congress.

2) A medium-term broadening recovery in Lithium pricing from later this year & into a more positive outlook in 2026 and beyond. Personally I think more supply has been curtailed (or predicted supply that will not come on) than currently modelled, and I believe demand will continue to grow at strong rates driven by increasing EV & BESS adoption as well as potential game--changing catalysts such as mastering Solid State batteries that can take drivers over 1000kms without recharging.

Anyways - full disclosure - I am not a lithium sector expert!

Just been following it closely & steadily accumulating a position in PLS & LTR, in anticipation of the current heavy negativity towards the sector beginning to lift as the boom/bust commodity cycle runs its course & green shoots emerge.