Two ASX Lithium Stocks Set to Surge When Demand Heats Up Again

Jindalee Lithium (ASX: JLL), Liontown Resources (ASX: LTR) are top stocks that could be positioned for long-term gains when lithium demand surges again. Investors who have followed commodity cycles know that opportunities often emerge during periods of quiet accumulation rather than peak excitement. Gold is a clear example. Between 2020 and 2022, gold was on a steady but uninspiring path, drawing little attention as investors chased higher-risk assets. Then, when market volatility returned, which is the foundation of demand, and uncertainty dominated the headlines, gold demand spiked, and the miners who had been quietly accumulating during the stagnant period outperformed the market.

We see a similar setup unfolding in lithium today. Prices have retreated sharply from their 2022 highs, leaving many investors overlooking the sector just as long-term demand is set to accelerate. The companies positioned to benefit most from this cycle are often the ones already building scale and resilience during quieter times.

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A Classic Boom and Bust Story With More to Come

The price of lithium, like most commodities, is shaped by the simple forces of supply and demand. During 2020 and 2021, prices remained relatively low and stable at around 40,000 to 60,000 CNY per tonne, reflecting an oversupplied market. That dynamic shifted dramatically in 2022, when demand for electric vehicles surged across China, Europe, and the United States. Lithium prices climbed rapidly, peaking above 600,000 CNY per tonne in late 2022, a nearly tenfold increase in less than two years.

Since then, the market has reversed as new mines in Australia, Chile, and Argentina have ramped up production, flooding the market with fresh supply and pushing prices lower. Yet, this cycle is far from over. With continued growth in electric vehicles, innovation in battery technology, and the broader transition toward clean energy, demand for lithium will only increase. At some point, supply will again struggle to keep pace, creating the conditions for another boom that could bring prices back toward previous highs.

The main future growth catalysts for lithium

Even with the discovery of new lithium deposits, it often takes decades for exploratory projects to be developed into fully producing, profitable operations. By contrast, demand shocks in high-tech industries can emerge in a matter of months or just a few years. A clear example is artificial intelligence, where adoption and investment surged almost overnight, creating a powerful boom across the technology sector.

• Electric Vehicle (EV) Adoption

• Energy Storage & Grid Demand

• Supply-Side Dynamics

Jindalee Lithium (ASX: JLL) is a top lithium play 

Jindalee Resources (ASX: JRL) is an Australian exploration company focused on lithium and critical minerals, delivering a share price return of 171 percent over the past year. The company is best known for its U.S. assets, led by the McDermitt Lithium Project in Oregon, which ranks among the largest lithium deposits in the United States. 

Recently, McDermitt was assigned a valuation of approximately USD 500 million through a non-binding letter of agreement with Constellation Acquisition Corp. I, a U.S.-listed SPAC. The proposed transaction would see McDermitt listed in the U.S. to access deeper capital markets, supported by a planned raise of USD 20–30 million, with USD 4 million already committed by the SPAC’s sponsors. What is particularly notable for investors is the comparison between this USD 500 million valuation for McDermitt and Jindalee’s current market capitalisation of only AUD 47 million, highlighting a significant disconnect between asset value and equity market recognition.

The key risks for Jindalee stem from its early stage of development, as the company remains in the exploration phase and will require substantial capital funding to progress its projects. In addition, Jindalee’s valuation is closely tied to the global lithium price, which is highly cyclical and subject to significant volatility driven by supply and demand dynamics.

Liontown Resources: Emerging Tier-One Lithium Producer

Liontown Resources (ASX: LTR) is an Australian lithium 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 lithium prices recover, offering material upside leverage to any market rebound.