The report from "Big Banks" predicts that supply and demand imbalance will drive up short-term lithium prices, raising the target prices for Ganfeng Lithium and Tianqi Lithium

HSBC Research stated that the lithium market is currently experiencing tightness. On the supply side, export restrictions from Zimbabwe are expected to reduce global supply by approximately 40,000 tons of lithium carbonate equivalent (LCE) this year. Even if mines restart, the additional supply may not fully offset the shortfall. Meanwhile, demand remains strong, primarily driven by the rapid growth of energy storage systems (ESS). The bank expects lithium demand to grow by 19% year-on-year this year, with a compound annual growth rate of 13% until 2030.

However, the bank believes there are risks on both sides; if Zimbabwe fully resumes exports, supply may normalize, while the visibility of electric vehicle demand remains somewhat uncertain. The bank has raised its lithium price forecasts for 2026 to 2027, expecting lithium prices to remain at around 150,000 RMB per ton this year.

Regarding stocks, the bank maintains a "Buy" rating for Ganfeng Lithium (01772.HK) H shares and Ganfeng Lithium (002460.SZ) A shares, with target prices raised from HKD 54 to HKD 92, and from RMB 65 to RMB 98, respectively, expecting further improvement in earnings this year.

As for Tianqi Lithium (09696.HK) H shares and Tianqi Lithium (002466.SZ) A shares, the bank maintains a "Hold" rating, with target prices raised from HKD 49 to HKD 57, and from RMB 45 to RMB 59, respectively. Although the company’s earnings are expected to continue improving, the positive factors have already been reflected, and execution risks and earnings volatility related to lithium prices and SQM still exist