Lithium mining stocks advanced in morning trading. At the time of writing, Ganfeng Lithium Group Co.,Ltd. (01772) was up 6.45%, trading at HK$69.35, while Tianqi Lithium Corporation (09696) rose 3.42%, reaching HK$57.45.

On the news front, on January 23rd, the lithium carbonate main contract on the Guangzhou Futures Exchange once surged over 5%, hitting a high of 178,000 yuan per ton.

A J.P. Morgan report highlighted that the bank conducted a field trip in Yichun last week, visiting lithium refineries/tailings facilities and meeting with local experts.

Key observations included: the restart timeline for CATL's Jianxiawo lithium mine remains uncertain, and lithium prices are expected to stay elevated until its restart; the production cost of lithium carbonate from integrated lepidolite mines has fallen to around 60,000 yuan per ton; current prices are incentivizing more supply, and recycling volumes are projected to increase significantly by 2028.

J.P. Morgan expressed greater optimism about short-term lithium prices but adopted a more cautious stance on the medium-term outlook.

The bank was notably impressed by how low lepidolite costs could fall and anticipates further cost reductions in the future.

It identified a short-term trading opportunity in lithium stocks, suggesting that share prices would catch up with the rally in lithium carbonate prices.

In J.P. Morgan's view, lithium prices are expected to remain high as investors delay their expectations for mine restarts.