UBS has revised its lithium price forecasts upwards, citing potential extended supply disruptions in China. Analyst Lachlan Shaw indicated that investigations into mining compliance within China could jeopardise up to 240,000 tonnes of lithium carbonate equivalent (LCE), representing approximately 15 per cent of the global supply. The potential disruptions include suspensions at operations such as Zangge Mining, CATL’s Jianxiawo mine, multiple Yichun lepidolite operations and Citic Guoan’s brine project in Qinghai.
UBS now projects that CATL’s Jianxiawo mine will remain offline for approximately 12 months, Zangge for 1–2 months, further mine shutdowns at Yichun from late September, and production cuts at Citic Guoan. As a consequence of these anticipated disruptions, UBS has adjusted its spodumene price forecasts upward by 9–32 per cent and lithium carbonate and hydroxide prices by 4–17 per cent across the 2025–28 period.
The bank’s base case now assumes Chinese lithium carbonate prices at RMB 100,000 per tonne. The forecast includes potential upside to RMB 120,000 a tonne if enforcement is stricter, or downside to RMB 70,000 a tonne under looser conditions. Shaw noted that demand for electric vehicles remains strong, with global EV sales increasing by 26 per cent year-on-year in June, driven primarily by China, which saw a 31 per cent increase. Additionally, battery energy storage project pipelines have more than doubled over the past year.
UBS is a global financial services company providing wealth management, investment banking, and asset management services. CATL is a Chinese battery manufacturer known for its lithium-ion batteries for electric vehicles and energy storage systems. “Broader and deeper Chinese supply disruptions drive price upgrades,” Shaw said.
