Longtime lithium lovers have been waiting for the perfect storm to drive their holdings higher. According to our market experts, their time might have finally come. Especially if you’re already a holder of lithium stocks like Pilbara Minerals (PLS).
For most of 2024 and 2025, lithium stocks were essentially dead in the Australian resources market. Now, Julia Weng of Paradice Investments says the lithium cycle is finally back on. Only this time is structurally different from the 2021-22 boom. Demand is broader, supply is tighter, and PLS is her preferred expression. Fairmont Equities founder, Michael Gable, has the charts to back it up, too.
Why this lithium cycle is different
Weng’s structural case rests on three demand drivers stacked on top of each other, each at a different point in its adoption curve.
Speaking on the new-look Switzer TV this week, she shared:
“We…really like PLS principally because of our look on lithium prices,” she said. “We think the lithium price cycle this time is more sustainable than in 2021-22 Then was driven by EVs. And EVs is still growing 20 per cent year on year. But we also got a whole variety of other factors, such as energy storage, which is growing at the moment, 50-100 per cent year on year we’re seeing in Australia. We just need more batteries.”
The EV demand thesis is the original driver from the last cycle, still intact. Energy storage is the new driver — battery deployment growing at multiples of EV growth as utility-scale and residential storage rolls out. The third driver, which Weng flagged as just now coming online, is electric trucks.
“We also think uptake of EV trucks, which are now taking off. They’re like five times the battery pack of a passenger EV. And so they’re just adding to that demand.”
Weng’s point is that the three drivers are now stacking in lithium’s favour. The energy security narrative driven by the Iran conflict, in her reading, is not creating the trend but accelerating something that was already in motion. “We just put the spotlight on energy security,” she said. “EV sales are going off the charts.”
And where once there was a glut of lithium on the market, Weng now shares that supply side has not kept pace with the new demand.
“At the same time, we’re seeing a bit of a crunch in the supply. China, Africa in parts, it’s not that easy. I know lithium is meant to be abundant, but some of these high cost mines in northern China are not that easy to operate. There’s a lot of toxic waste that comes out, that needs to be dealt with.”
Under the hood with Pilbara Minerals
Weng named Pilbara Minerals – the local lithium market darling – as her preferred expression of the thesis. Her case rests on PLS being among the lowest-cost producers in the global lithium industry, meaning it is one of the producers least exposed to the next move down in the lithium price, and the most leveraged to the move up.
“PLS is a particularly good mine,” Weng said. “First quartile, excellent balance sheet, really good management.”
Pilbara Minerals (ASX: PLS)
The chartist agrees
Weng’s case for PLS is fundamental. Michael Gable, founder of Fairmont Equities and the show’s regular technical analyst, made the same call from the chart side on the same episode.
“[PLS is] in an uptrend. I think it’s still got further to go, at least in the short term,” Gable said. He highlighted “the consolidation period that PLS recently underwent”, and added “that gave [PLS] the energy to continue on with its uptrend.
“Even though it’s only recently broken out of that consolidation, I think it can continue higher. This is one that we hold as well. And I’m happy just to continue holding.”
Gable noted that he and his clients hold the stock but are not adding aggressively at current levels. His advice for viewers looking to enter was straightforward: “If you’re looking to buy it, just look to buy on a dip.”
This article does not take into account the investment objectives, financial situation or particular needs of any individual. It does not constitute formal advice. Consider the appropriateness of the information in regards to your circumstances. Before acting on anything we discuss, we strongly recommend you seek the appropriate professional advice.
