Daiwa expects global lithium supply to improve, downgrades TIANQI LITHIUM rating to "Sell"

Daiwa published a research report indicating that the global lithium market supply-demand balance is expected to improve from this year to next year, with demand for energy storage systems and electric vehicle batteries exceeding expectations. However, due to supply growth being hindered, the current outlook for lithium price increases next year remains conservative.

Daiwa maintains a "Underperform" rating on Ganfeng Lithium (01772.HK), raising the target price from 23 HKD to 53 HKD, and downgrades the A-share rating of Tianqi Lithium (002466.SZ) from "Underperform" to "Sell," with the target price increased from 36 RMB to 50 RMB. It predicts that the global lithium supply surplus will reach 76,000 tons in 2025, decreasing to 54,000 tons in 2026, significantly down from 121,000 tons in 2024.

The firm forecasts that lithium prices will remain in the range of 75,000 to 90,000 RMB per ton next year, with limited upward potential compared to the current level of 85,000 RMB per ton. It believes that lithium prices in China will remain weak from the fourth quarter of this year to the first quarter of next year, mainly due to weak demand during the Lunar New Year and the global electric vehicle market entering the off-season