JP Morgan: More optimistic about short-term lithium prices, but cautious about medium-term trends.

JPMorgan released a research report stating that last week, the bank conducted an on-site inspection in Yichun, visited a lithium refining plant/tailing facility, and met with local experts. The main observations are as follows: (1) The restart schedule of the lithium mine area under Contemporary Amperex Technology (03750) is still uncertain, and lithium prices will remain high until it restarts. (2) The cost of lithium carbonate from the lithium mica integrated mine has decreased to 60,000 RMB per ton. (3) Current prices are triggering more supply, and the recovery volume is expected to significantly increase in 2028. After this trip, JPMorgan is more optimistic about short-term lithium prices, but more cautious about the medium-term trend. The fact that the cost of lithium mica can be reduced to such a low level has left a deep impression on the bank, and it is expected that future costs will further decrease. The bank sees trading opportunities in short-term lithium industry stocks, with stock prices expected to catch up with the rise in lithium carbonate prices. In JPMorgan's view, lithium prices are expected to remain high as investors postpone their expectations for the restart of mines.