UBS Expert Call Takeaway: Lithium Prices Rise Further; Stay Selective on Battery Materials
Summaries are public. PDF access requires an active membership; all members have the same access. Sign in
Following a recent expert call, UBS highlights a constructive outlook on lithium prices, suggesting the current upcycle may persist beyond 2027 and potentially reach RMB 250,000 per tonne. While global effective lithium chemical supply is projected at 1.975 million tonnes LCE for 2026 and 2.417 million tonnes for 2027, experts warn these forecasts appear optimistic. They do not fully account for downside risks such as potential delays in the restart of CATL's Jiangxi lepidolite mines and Zimbabwe's lithium concentrate export ban.
Demand remains more sustainable, with 2026 global lithium demand estimated at 2.038 million tonnes LCE, growing 27% year-on-year. Energy storage demand is robust, and electric vehicle penetration retains substantial upside, particularly regarding the electrification of heavy commercial trucks in China.
Regarding battery materials, the expert expresses distinct preferences based on cost structures and capacity discipline. Anode materials face imminent price increases, driven by rising coke costs and the conclusion of destocking cycles. Separator materials also present significant pricing upside due to limited capacity expansion among key players. Conversely, the expert remains cautious on LFP cathodes, citing severe cost pressures and anticipated new capacity additions in the second quarter of 2026. Battery foil maintains a neutral stance, with utilization rates at 90% and limited room for further processing fee increases despite improved unit economics from 2025 troughs.