Thursday was a strong day for ASX 200 lithium stocks.
Shares in leading lithium producer Pilbara Minerals Ltd (ASX: PLS) lifted by 5.4% from Wednesday's close to end the day at $3.30 per share.
Fellow Western Australian lithium miner Liontown Resources Ltd (ASX: LTR) fared even better with its shares rocketing by 11.2% during the session.
However, it was Mineral Resources (ASX: MIN) that stole the spotlight.
Shares in this diversified miner ballooned by 13.7% on Thursday after announcing production records for the September quarter.
Notably, the company also reported a 31% increase in the selling prices for its lithium.
So, what sparked Thursday's eye-catching rally?
It appears that leading American investment bank JPMorgan Chase & Co (NYSE: JPM) may have played a part.
In a nutshell, the broker released a bullish research note on the lithium sector where it forecast a sharp rebound in prices.
Let's take a closer look at JPMorgan's viewpoint, as reported in the Financial Review.
Image source: Getty Images
Lithium prices set to rise?
JPMorgan appears upbeat on lithium's near-term future.
It upgraded its forecast for spodumene – the type of lithium mined in Australia – from US$800 per tonne to between US$1,100 and US$1,200 per tonne for 2026 and 2027.
Here, it cited growing demand for electric vehicles and higher expected production rates for large-scale battery storage.
JPMorgan's head of basic materials research, Lyndon Fagan, commented:
After what was looking like a soft few years ahead for lithium prices, energy storage battery shipments have shown massive growth year-to-date.
Fagan added that batteries are expected to account for about 30% of lithium demand in 2026, rising to 36% by the end of the decade.
In turn, the broker increased its long-term spodumene price forecast from US$1,100 per tonne to US$1,300 per tonne.
So what?
Stronger prices help drive revenue and margins for lithium miners, which can potentially lead to significant share price gains.
And JPMorgan has now upgraded its outlook for Pilbara Minerals shares from neutral to overweight.
As a sidenote, the company recently announced a 24% increase in the average realised selling price for its lithium product.
Overall, Pilbara Minerals shares have now increased by 119% in the past six months.
Meanwhile, JPMorgan also lifted its rating for Mineral Resources and Liontown shares to neutral – up from its most recent underweight classification.
Liontown shares have now soared by 116% in the past six months, with Mineral Resources shares rising by 134%.
For context, the All Ordinaries Index (ASX: XAO) is up by 10% during the same period.
