The Global Lithium Resources (ASX:GL1) share price is up 52% in a week

This lithium explorer’s shares hit a record high today…

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The Global Lithium Resources Ltd (ASX: GL1) share price is charging higher again on Friday.

Earlier today, the lithium explorer’s shares were up as much as 12.5% to a record high of 45 cents.

When the Global Lithium Resources share price hit that level, it was up 52% since the end of last week.

Why is the Global Lithium Resources share price rocketing higher?

Investors have been bidding the Global Lithium Resources share price higher this week despite there being no news out of the company.

However, Global Lithium Resources isn’t the only lithium-focused company rising this week.

The likes of Galaxy Resources Limited (ASX: GXY), Orocobre Limited (ASX: ORE), Piedmont Lithium Inc (ASX: PLL), Pilbara Minerals Ltd (ASX: PLS), and Vulcan Energy Resources Ltd (ASX: VUL) shares are all up strongly this week as well.

This has been driven by a very bullish broker note out of JP Morgan which reveals that the investment bank is becoming very positive on lithium. So much so, it has increased its price forecasts materially to reflect this.

Lithium price upgrades

JP Morgan’s analysts have raised their long term-lithium spodumene price forecast by 31% to $850 a tonne and their long-term lithium hydroxide price forecast by 12% to US$14,000 a tonne.

The investment bank is bullish due to its belief that there isn’t enough lithium to meet demand for the foreseeable future. This strong demand is being driven by the electrification revolution, with households turning to electric vehicles (EV) and battery power storage.

It commented: “We have rebuilt our model which is still based off JPM’s global equity team assumptions for auto sales, EV roll out, and battery capacity. The team expects total EV penetration of 45% in 2030, with battery electric vehicles (BEVs) at 21%. BEVs account for the vast majority of lithium demand due to greater battery size when compared to plug in hybrid & hybrid vehicles.”

How does this benefit Global Lithium Resources?

This could be good news for the Global Lithium Resources share price.

The company owns the Marble Bar Lithium Project in the Pilbara region of Western Australia.

It has defined a maiden Inferred Mineral Resource of 10.5Mt @ 1.0% Li20 at its Archer deposit, which confirms the project as a significant new greenfield lithium discovery.

If prices rise in line with JP Morgan’s forecasts, this project has the potential to be generating strong free cash flows in a few years. But time will tell if that is the case.

Should you invest $1,000 in Global Lithium right now?

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Motley Fool contributor James Mickleboro owns shares of Galaxy Resources Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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