Lithium mining shares experienced a notable upswing during the trading session.

At the time of writing, shares of Tianqi Lithium Corporation (09696) had risen by 5.11% to HK$45.24, while Ganfeng Lithium Group Co.,Ltd. (01772) saw a gain of 5.28%, trading at HK$56.85.

Analysts point to several supply-side factors supporting the market. A major Australian operation, Greenbushes, has reportedly reduced its full-year production guidance by 11%. Furthermore, the restart and shipment timeline for Core Lithium is progressing slower than market expectations, potentially extending into the fourth quarter.

In Africa, political instability in Mali, while not directly impacting local lithium mining yet, introduces an element of uncertainty as the situation remains unresolved.

Domestically in China, the restart of the Jianxiawo mine is also progressing slower than anticipated, with potential delays until Q4. There are also expectations that other mica lithium mines in Jiangxi province may halt operations for permit renewals, contributing to both actual and anticipated reductions in supply.

On the demand side, downstream production scheduling for June continues to hit record highs. Following industry-wide inventory drawdowns in May, the further strengthening of demand in June is expected to accelerate this destocking trend.

This supply-demand dynamic underpins a positive outlook for lithium prices. One research note suggests that while concerns over demand and inventory changes have pressured lithium prices since May 2026, the tight supply-demand balance is not expected to reverse imminently. The report maintains a price target forecast of 250,000 yuan per tonne and anticipates lithium prices could strengthen in the second half of 2026, highlighting potential investment opportunities following recent sector adjustments.