ASX Lithium Stocks Set to Surge When Demand Heats Up Again

Lithium Is Heating Up Again. Why Prices Are Surging and Investors Are Rushing Back In

ASX lithium stocks have surged, and Core Lithium (ASX: CXO) has been one of the standout movers with a gain of 147% over the past six months. The obvious question we keep hearing from investors is why lithium demand has suddenly accelerated and what this means for the years ahead. Between January and May, lithium prices slid from CNY$77,000 to about CNY$60,000 as the market struggled with stubborn oversupply.

New tonnes from Australia, China, and several emerging African assets entered the system faster than demand could keep up. During this period analysts flagged that supply growth exceeded 35 percent in some segments while consumption, although rising, simply could not absorb the wave of new supply.

From July onward, that entire picture flipped. Prices pushed back toward CNY$91,300 and sentiment began to turn as the market started to see early signs that oversupply may be peaking. The comments from Ganfeng Lithium chairman Li Liangbin added another spark, suggesting lithium demand could climb 30 percent next year with prices potentially revisiting the 200,000 yuan level. These types of comments do not guarantee a straight line rally, but they do reflect how quickly the tone can shift when the market senses tighter conditions ahead.

What are the Best Mining ASX Stocks to invest in right now?

Check our buy/sell tips

Jindalee (ASX: JLL) is a top lithium play

Jindalee Resources (ASX: JLL) has become one of the more interesting names in the lithium space, returning 171% over the past year and drawing fresh attention to its position in the global critical minerals supply chain. The company is best known for its US portfolio, anchored by the McDermitt Lithium Project in Oregon, which is widely considered one of the largest undeveloped lithium deposits in the country. It is the kind of asset that can shift the conversation when sentiment turns back toward long life lithium supply.

What caught our eye recently was the valuation assigned to McDermitt through a non-binding letter of agreement with Constellation Acquisition Corp. I, a US listed SPAC. The proposal places a value of roughly US$500 million on McDermitt and includes a planned US$20 million to US$30 million capital raise, with US$4 million already committed by the SPAC sponsors. The strategy is clear. Jindalee wants to position McDermitt in the US market, where the depth of capital is far greater and where strategic interest in domestic lithium sources continues to build.

When you compare that US$500 million valuation to Jindalee’s current market capitalisation of about A$51 million, the disconnect is impossible to ignore. It suggests the equity market is yet to fully reflect the strategic importance of the asset.

The risks are still real and investors need to keep them front of mind. Jindalee remains in the exploration phase and will need significant funding to move McDermitt toward development. The company’s valuation is also closely tied to lithium prices, which have shown how quickly they can swing based on changes in supply additions and demand from the electric vehicle sector. For now, the combination of a world class asset and a clear strategy to tap into US capital channels gives Jindalee a compelling narrative, but progress will ultimately depend on funding, execution, and the broader market cycle.

Liontown Resources: Emerging Tier-One Lithium Producer

Liontown Resources (ASX: LTR) is an Australian company based in Western Australia, focused on supplying battery minerals essential to the global energy transition. The company’s operations are anchored by two projects: Kathleen Valley and Buldania.

The Kathleen Valley Project, which began production in 2024, is now in the commercial ramp-up phase and stands as Australia’s first underground lithium mine. With a resource of 150 million tonnes at 1.33% Li₂O, Kathleen Valley is regarded as a tier-one hard-rock lithium deposit. Supporting this is the Buldania Lithium Project, an earlier-stage asset with 15 million tonnes at 1.0% Li₂O, providing additional resource optionality to supplement long-term growth.

In FY2025, Liontown raised A$316 million through an equity placement, followed by a A$56 million share purchase plan, significantly strengthening its balance sheet during ramp-up. By mid-2025, the company had produced 295,000 tonnes of lithium concentrate, selling the majority and generating A$297 million in revenue. Operating performance is improving, with unit costs trending down to A$802 per tonne, moving closer to industry averages.

This progress highlights Liontown’s successful transition from developer to producer. With production efficiencies improving and costs on a downward path, the company is well positioned to capture stronger margins and cash flows as prices recover, offering material upside leverage to any market rebound.