UBS Sparks Lithium Market Rally with Price Upgrades Following Chinese Mine Closures

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LONDON — UBS has raised its lithium price forecasts following regulatory-driven mine closures in China, reigniting investor interest in a sector that has faced years of oversupply and falling prices. The bank now expects spodumene prices to rise by up to 32% and lithium carbonate and hydroxide prices by 4–17% across the 2025–2028 period.

The revisions come amid growing concerns that up to 240,000 tonnes per annum of lithium carbonate equivalent—roughly 15% of global supply—could be disrupted. Key operations affected include CATL’s Jianxiawo mine, Zangge Mining in Qinghai, multiple lepidolite mines in Yichun, and Citic Guoan’s brine project, all facing suspensions or production limits.

UBS analysts Lachlan Shaw and Sky Han project lithium carbonate prices in China to reach RMB 100,000 per tonne (US$13,980) in 2026. Spodumene prices are forecast to climb to US$1,250/tonne in 2026, US$1,150 in 2027, and US$1,350 in 2028. The bank’s long-term spodumene price remains at US$1,200/tonne, slightly below the market consensus.

The market reaction was swift, with lithium stocks rallying. Core Lithium (ASX: CXO), which had struggled amid price declines in 2022, saw a 25% gain since June. However, shares fell 12.5% to $0.105 after announcing a $50 million institutional placement and a share purchase plan to fund its Finniss Lithium Project.

Current spot prices sit at US$11,388.06/tonne for lithium carbonate and US$920/tonne for 6% Li₂O spodumene. Rising EV sales—up 26% globally and 31% in China year-on-year—alongside a 117% increase in energy storage project pipelines, are further supporting bullish sentiment.

Sources: UBS, Reuters, Stockhead, Investing.com.

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