UBS announced a significant upward revision of its lithium price forecast, with the highest increase reaching 74%, and expects global lithium demand to double to 3.4 million tons by 2030 compared to 2025. This marks the third super cycle for lithium prices following the previous two cycles.
According to news from the Wind Trading Desk, this adjustment is based on UBS's comprehensive assessment of global electric vehicle and energy storage system demand, a reassessment of supply prospects, and the market reality that lithium prices have risen by approximately 65% since the last update. The UBS automotive and battery team's Q-Series report on the 5th pointed out that electric vehicles are nearing the realization of the &#34;triple parity&#34; in cost, range, and charging time, with the breakdown of five electric vehicle batteries showing that battery costs have decreased by about 50%, and lower costs will drive stronger demand.
UBS raised its 2026 spodumene price forecast by 74% to $3,131 per ton, while the prices for lithium carbonate and lithium hydroxide were both raised by 58% to $26,000 per ton. The 2027 spodumene price forecast is $3,469 per ton, which is 22% higher than previous expectations. These price forecasts are significantly above market consensus, reflecting UBS's judgment on the tight supply-demand situation.
The continuous decline in lithium inventory in China has supported the price increase. Data shows that by the end of 2025, China's lithium carbonate inventory will have significantly decreased, with the number of months of inventory reduced, indicating that the supply chain is under tension. Meanwhile, a supply shortage is expected in the market in 2025, with inventory continuing to be consumed.
<h2>Demand Side: Dual Drive of Electric Vehicles and Energy Storage</h2>
UBS predicts that global lithium demand will grow by 14% in 2026 and by 16% in 2027. In the long term, demand will double from 1.7 million tons in 2025 to 3.4 million tons in 2030, with a compound annual growth rate of 13% before 2035.
The demand for electric vehicles continues to grow steadily. UBS's research draws two key conclusions: first, electric vehicle sales will accelerate again in the medium term, although the shift in U.S. policy may cause recent global electric vehicle growth rates to fall below the five-year compound annual growth rate of 13%, the realization of &#34;triple parity&#34; will drive accelerated growth in electric vehicle sales by the end of the century. UBS expects the global electric vehicle penetration rate to reach 58% by 2035, up from 23% in 2025. Second, Chinese automakers will continue to rise, becoming the most competitive in the mass market segment.
The surge in demand for energy storage systems has become an important growth point. China's new capacity pricing policy has prompted UBS to raise its energy storage demand forecast for 2026-2035 by 30-53%. The share of energy storage in lithium demand will increase significantly from 8% in 2020 to 42% in 2035, becoming an important pillar of lithium consumption.
From the perspective of battery technology, the production share of lithium iron phosphate (LFP) batteries continues to rise, dominating global electric vehicle battery production by the end of 2025. The market share of plug-in hybrid electric vehicles (PHEVs) is also steadily increasing, providing additional support for lithium demand.
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<h2>Supply Response: Growth but Still Struggling to Meet Demand</h2>
The supply side is responding, but the growth rate lags behind demand growth. In 2025, primary supply is expected to grow by about 18%, and if recycling is included, it will be close to 23%, still lower than the demand growth of 26% (measured in lithium carbonate equivalent) and 29% (measured in total GWh). This has led to a shortage in the market, with inventory continuing to decline throughout the year.
Supply will respond to rising prices and tightening markets. UBS expects a year-on-year growth of about 20% in risk-weighted supply by 2027, and a growth of 13% in 2028. Although this supply response is accelerating, the market balance will remain tight against the backdrop of strong demand growth.
Recycled supply will gradually increase, but its proportion will be limited. In 2026, recycled lithium supply is expected to account for 5.3% of battery demand, and this ratio will increase to 6.7% by 2030. The growth rate of recycled supply will adjust with market balance and price changes.
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<h2>Price Outlook: Significantly Upgraded but Still Within Historical Range</h2>
UBS has raised its price forecasts for spodumene and chemicals by as much as 74%. For 2026, the price forecast for spodumene (6% Li2O) is $3,131 per ton, a 74% increase from the previous $1,800 per ton, and 73% higher than market consensus. The price forecasts for lithium carbonate and lithium hydroxide are both $26,000 per ton, up 58% from previous forecasts, and 50% and 58% higher than market consensus, respectively.
Price forecasts for 2027 show continued strength. The price forecast for spodumene is $3,469 per ton, while lithium carbonate and lithium hydroxide are both forecasted at $28,525 per ton. These price levels have significant premiums over market consensus, reflecting UBS's more aggressive judgment on supply-demand tightness.
Medium to long-term price forecasts are relatively moderate. From 2028 to 2030, as supply responses gradually come into play, spodumene prices are expected to gradually decline from $2,750 per ton to $1,750 per ton, while lithium carbonate and lithium hydroxide prices will fall from $23,125 per ton to $20,250 per ton. Long-term real prices (based on 2026) are maintained at $1,200 per ton for spodumene and $18,000 per ton for lithium carbonate and lithium hydroxide.
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UBS acknowledges that it is challenging to choose an appropriate price level given that historical spot prices have been more than eight times higher than long-term incentive prices, and that historical profit margins for converters have not provided a reasonable reference for raw material pricing. However, from a qualitative perspective, current price forecasts remain within historical ranges, and historically, electric vehicle manufacturers have been able to adapt to price increases with limited impact on overall demand; for energy storage systems, the importance of material costs relative to module and battery costs is lower
<h2>Market Balance: Shortage Situation Supports Prices</h2>
The market balance indicates that supply shortages are intensifying. In 2025, the market is expected to experience a shortage of approximately 15,000 tons, and the shortage is projected to expand to 18,000 tons in 2026. This ongoing shortage will support prices at high levels.
Inventory data confirms the tight situation. China's lithium carbonate inventory has been continuously declining from its peak in 2023, entering a rapid destocking phase by the end of 2025. Although there was a pause in December and January, it has recently begun to decline again. The reduction in inventory levels and months of inventory indicates a tight supply chain. The destocking speed of downstream companies is particularly evident, with the current annualized destocking rate exceeding 120,000 tons. The inventory of lithium hydroxide is also continuously declining, with the current annualized destocking rate at approximately 50,000 tons.
The supply-demand gap is expected to be partially alleviated in 2027. As supply responds, the market is expected to experience a surplus of approximately 61,000 tons in 2027, which will ease price pressures. However, in 2029 and 2030, the market will again turn to shortages, with deficits of 63,000 tons and 87,000 tons, respectively.

UBS has significantly raised its forecast price for spodumene in 2026 by 74% to USD 3,131 per ton, and adjusted lithium carbonate to USD 26,000 per ton. This move is based on the realization of "triple parity" in electric vehicles and a surge in energy storage demand, with global demand expected to double to 3.4 million tons by 2030. UBS believes that the market has entered the third super cycle of lithium prices, and the ongoing supply-demand gap will support prices significantly above market consensus

The third lithium supercycle! UBS: Upgrading lithium price forecasts across the board, demand is expected to double by 2030