The S&P/ASX 200 Materials Index (ASX: XMJ) lifted 1.26% in Tuesday trading, but four ASX 200 lithium shares soared considerably higher.
Lithium explorers IGO Ltd (ASX: IGO), Allkem Ltd (ASX: AKE), Mineral Resources Ltd (ASX: MIN), and Pilbara Minerals Ltd (ASX: PLS) all leapt on the market today.
Let's take a look at what may have impacted these lithium companies today.
What's going on
IGO shares rose 4.49% today, while Mineral Resources shares jumped 5.28%. Meanwhile, Pilbara shares gained 5.18% and Allkem shares climbed 3.45%.
Today's lift in ASX lithium shares comes amid broker upgrades from analysts at UBS. The broker upgraded Mineral Resources and IGO to a buy and Pilbara Minerals to neutral, while it retained its buy rating on Allkem, the Australian Financial Review reported.
UBS has lifted its lithium price outlook by up to 50%, according to the publication. Commenting on lithium, UBS analyst Lachlan Shaw said:
We believe lithium markets will remain in deficit for the near and medium term before moving to structural deficit long term.
This needs a demand rationing price, for which we have seen no evidence in the past 12 months despite record-high prices that are orders of magnitude above costs
Meanwhile, Pilbara Minerals has also just received positive broker coverage from Morgans, as my Foolish colleague James reported this morning.
Morgans has maintained an add rating on Pilbara shares and lifted the price target to $5.40.
Commenting on Pilbara, analysts said:
We maintain our ADD rating given the upside that we see to our target price. The company's growing cash balance gives it options for capital management including buybacks or a special dividend.
Share price snapshot
The IGO share price has risen 25% in the last year.
Mineral Resources shares have exploded 56% over the past 12 months.
Pilbara shares have risen 46% in the last 52 weeks.
Allkem shares have soared 39% in the past year.
