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.”

PLS Share Price Slump Today due to CATL reopening Yichun Mine in the near future:

from Discovery/Alert.com

When Will Production Resume at the Yichun Mine?

According to reports from China's Securities Times, CATL is expected to resume operations at the Jianxiawo lithium mine soon, following approximately one month of suspension. The company has been actively engaged in negotiations with regulatory authorities to expedite the renewal process.

Industry sources familiar with Chinese mining regulations suggest that standard license renewal procedures typically require two to three months, making this expedited timeline notable. The accelerated process likely reflects both CATL's strategic importance to China's industrial policy and the economic impact of the production halt.

Technical preparations for restart have been underway throughout the suspension period, with maintenance crews maintaining equipment readiness to minimize the transition time once regulatory approval is secured. This preparatory work includes safety inspections, equipment calibration, and workforce scheduling to ensure a smooth production ramp-up.

The mine's expected restart timeline aligns with China's broader policy objectives of maintaining stable supply chains for its dominant electric vehicle manufacturing sector, which represents a strategic national priority in the country's industrial development plans.

What Factors Are Influencing the Permit Renewal Process?

Several key elements are affecting the timeline for resumption:

• Regulatory Scrutiny: China's increased oversight of mining operations has introduced more comprehensive compliance reviews before license renewals are granted. This includes assessments of environmental management systems, safety protocols, and resource utilization efficiency.
• Environmental Compliance: Stricter standards for extraction activities now require mining operations to demonstrate improved water management, reduced emissions, and comprehensive reclamation planning. Sources within the industry indicate that CATL has invested significantly in environmental technologies at the Yichun site to meet these elevated standards.
• Capacity Control Measures: Government efforts to manage lithium production growth reflect Beijing's strategic approach to resource management. Authorities are balancing the need for adequate supply with concerns about oversupply driving down prices and threatening the economic viability of domestic producers.
• Administrative Procedures: Bureaucratic processes for permit renewal involve multiple agencies including the Ministry of Natural Resources, environmental protection authorities, and local government officials. This multi-stakeholder approval process introduces complexity that can extend timelines even for priority projects.

Technical experts note that the Chinese government has recently implemented a more sophisticated regulatory framework that considers not just compliance factors but also strategic supply chain considerations in the permit renewal process. This approach reflects the maturation of China's mineral resource governance as the country balances immediate industrial needs with longer-term resource conservation goals.

Broader Context of China's Lithium Industry

How Does This Fit Into China's Resource Strategy?

The temporary suspension at Yichun aligns with Beijing's broader approach to managing its critical mineral resources. China has been implementing policies to:

• Control excessive capacity in the EV battery sector through strategic production quotas and licensing requirements
• Ensure sustainable development of lithium resources by implementing more rigorous extraction standards and requiring improved recovery rates
• Maintain strategic leverage in global supply chains by balancing domestic production with overseas investments and acquisitions
• Balance environmental concerns with production needs through enhanced regulatory oversight and technological upgrading requirements

China's approach reflects a sophisticated understanding of lithium's strategic importance beyond immediate market considerations. The country's planners recognize that control over lithium resources provides significant geopolitical leverage in an era of accelerating global energy transition.

Recent policy documents from China's National Development and Reform Commission emphasize the concept of "resource security" as a key component of national security, placing lithium among a select group of minerals deemed essential to the country's industrial autonomy and technological leadership.

What Other Developments Are Affecting China's Lithium Sector?

The Yichun situation occurs against a backdrop of significant changes in China's lithium landscape:

• New mining licenses being granted to companies like Yongxing Special Materials represent a careful expansion of production capacity to meet growing domestic demand while avoiding market oversupply
• Consolidation among smaller producers has accelerated as authorities favor larger, more technologically advanced operations that can implement best practices in extraction and processing
• Increased focus on recycling and alternative technologies, with major investments in lithium recovery from spent batteries and development of sodium-ion alternatives for certain applications
• Growing competition from international lithium sources, particularly in Australia, Chile, and Argentina, challenging China's dominant position in the processing segment of the supply chain

Geological experts note that China's domestic lithium resources, while significant, face challenges including lower average grades and more complex mineralogy compared to some international deposits. This geological reality has shaped the country's dual strategy of developing domestic resources while securing overseas supply through strategic investments and long-term agreements.

Supply Chain Implications

How Might the Resumption Affect Global Lithium Markets?

The anticipated restart of operations at the Yichun mine is expected to stabilize lithium prices that had surged following the suspension. Market analysts anticipate:

• Gradual normalization of spot prices as supply concerns ease, with potential reversion to pre-suspension levels within 4-6 weeks of resumed production
• Reduced pressure on battery manufacturers' input costs, supporting continued cost reduction trajectories for electric vehicle batteries
• Restored confidence in supply chain reliability, potentially reducing the risk premium currently embedded in lithium futures contracts
• Potential moderation of speculative trading activity as market fundamentals reassert themselves over short-term disruption concerns

Trading patterns on the Shanghai Metals Market suggest that sophisticated investors are already positioning for price stabilization, with futures contracts showing decreased volatility as information about the expected resumption has circulated through industry channels.

For international markets, the Yichun resumption represents one factor in an increasingly complex global lithium landscape, where production expansions in Australia and South America are counterbalanced by accelerating demand growth from battery manufacturing facilities worldwide. India's recent development of a battery-grade lithium refinery illustrates the global race to develop processing capacity.

Lithium stocks rip amid warning of more China disruptions

Gus McCubbingMarkets reporter

Aug 27, 2025 – 5.46pm

ASX-listed lithium stocks ripped higher on Wednesday after UBS warned that the disruptions to Chinese supply, which have triggered a spike in the price of spodumene, would likely continue for longer than expected.

The suspension of production of a major mine owned by Chinese battery giant Contemporary Amperex Technology earlier this month had already triggered a huge rally in lithium stocks, with the price of the white metal soaring about 70 per cent from a June low of $US575 a tonne.

ASX-listed lithium stocks rocketed on Wednesday after UBS warned disruptions to production of the white metal in China could continue for longer than first expected. Tony McDonough

CATL, the world’s largest manufacturer of electric vehicle batteries, said on August 10 that its lithium mine in China’s Jiangxi province would only be temporarily halted for at least three months after it failed to extend a key mining permit, according to Bloomberg.

But UBS analyst Levi Spry published a note on Tuesday which said the investment bank’s China team had now concluded that the CATL mine could be closed for 12 months because of the ongoing licensing issue.

This meant lithium prices could jump another 32 per cent in the next year.

As a result, UBS has upgraded PLS, Australia’s largest pure-play lithium company, from a “sell” to “neutral” and revised short-term share price target to $2.30, up from $1.60. It also upgraded fellow lithium producer IGO from “sell” to “neutral”, with a revised short-term share price target of $5.75, up from $4.80.

This came after PLS chief executive Dale Henderson on Monday said he was confident the lithium market would turn in his favour over the long run, after an extended price slide for the battery metal dragged the miner to a near $200 million annual loss.

“Exactly how long-lived [the delay] is remains to be seen, with higher prices potentially solving permitting issues more quickly and incentivising some latent capacity,” Spry said in the note. “Nonetheless, we see material upgrades to IGO and PLS earnings per share.”

UBS has also upgraded Mineral Resources to “buy” from a “sell” with its short-term share price target rising to $40.40 from $37.40, based on the expected disruptions.

“We upgrade Mineral Resources to buy following upgrades to our lithium price forecast, reflecting expectations for strict execution of Chinese mining right investigations, and resultant supply disruption,” UBS analyst Lachlan Shaw said in a separate note.

The upgrades unleashed a broad-based jump in ASX lithium stocks on Wednesday, with PLS jumping 8.8 per cent to $2.34, IGO up 3.9 per cent to $5.35, Mineral Resources 6.8 per cent to $37.45, and Liontown Resources 9.5 per cent to 92¢.

CATL’s mine, a key source of China’s supply of lithium, has been closely monitored by traders, who reportedly flew drones over the project last week as speculation mounted about its permit renewal.

Lithium prices surged in September last year when CATL suspended production at its project in Jiangxi, but swiftly reversed in February when the company announced it would restart the operation.

Wednesday’s share price jump comes after a burst of short covering in lithium stocks last week, with Perennial’s Natural Resources Trust portfolio manager Sam Berridge saying lithium had formed part of a broader rotation into resources stocks.

“There’s a preference from a number of funds to directing flows into the most shorted stocks within the resources sector – so lithium certainly ticks that box,” he said.

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.