UBS upgrades lithium price forecasts, stocks Alex Gluyas Share...

UBS upgrades lithium price forecasts, stocks
Alex Gluyas
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UBS has upgraded its lithium price forecasts and stock valuations, noting that the battery metal will remain in a physical deficit for the near and medium term.
The broker said that lithium markets have traded in anticipation of a demand “air pocket” whereby supply would catch up to slower demand in Europe and China.
However, China’s rapid reopening and growing expectations for a sales rebound post Lunar New Year caused UBS to refresh its outlook.
“We believe lithium markets will remain in deficit for the near and medium term before moving to structural deficit long term,” said Lachlan Shaw, analyst at UBS.
“This needs a demand rationing price, for which we have seen no evidence in the past 12 months despite record-high prices that are orders of magnitude above costs.”
UBS upgraded its spodumene/chemical prices by up to 50 per cent which led to earnings upgrades across its coverage.
The broker upgraded Pilbara Minerals to “neutral”, and Mineral Resources and IGO to “buy”.
UBS maintained its “buy” rating on Allkem.