Shares in Pilbara Minerals, the ASX's largest pure-play lithium miner, have exceeded $4 for the first time in 18 months, driven by optimistic forecasts from China. The stock closed at $4.09 on Tuesday, up 13 cents, marking a 49% gain over the past month and an 85% increase since the start of the year.
The rally is causing difficulties for short sellers, who hold nearly 14% of the company's stock, making it the third most shorted stock on the ASX. The surge follows comments from the chairman of major lithium supplier Ganfeng, who predicted a 30% to 40% increase in demand for the battery commodity next year.
Lithium sentiment is recovering after a downturn in 2024 and most of 2025, driven by slower-than-expected electric vehicle uptake and increased mine output from Africa, South America, and China. The benchmark price for spodumene concentrate, produced by all Western Australian lithium miners, currently stands at US$1,140 per tonne, having fallen below US$600 per tonne in June.
Factors contributing to the resurgence include rising EV sales in China, mine closures, and growing demand for large-scale battery storage to support data centres. Additionally, Mineral Resources' recent deal to sell a 30% stake in its active WA lithium business for $1.2 billion, above analyst expectations, is seen as a positive sign for the industry.
Other lithium stocks also saw gains, with Liontown Resources rising 2% to $1.49, up 161% year-to-date. IGO bucked the trend, falling 1.6%, with a 37.5% gain in 2025. The broader market declined, with the S&P/ASX 200 index dropping 1.9% to 8469.10.
