Will 2025 be the year ASX lithium shares make a triumphant return?

Are devoted ASX lithium share investors about to be handsomely rewarded?

| More on:
Hands held out to the sun on the dawn of a new day

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

We're now 27 days away from our social feeds being bombarded with glossy highlight reels accompanied by the wistful words, "And with that, the 2024 season comes to an end". For most ASX lithium shares, the jar of highlights to pull from looks rather barren for a second consecutive year.

Electric vehicle sales reportedly increased 26% in the first half of this year. Despite the EV demand, the price of lithium has weakened by 19% since the end of 2023. Persisting oversupply of the battery commodity has dragged on the sector, sending the market capitalisation of lithium miners down with it in 2024.

  • Pilbara Minerals Ltd (ASX: PLS) is down 39% year-to-date
  • Mineral Resources Ltd (ASX: MIN) has fallen 50%
  • IGO Ltd (ASX: IGO) is 44% lower
  • Liontown Resources Ltd (ASX: LTR) has dropped 59%.

However, the old saying goes, "It's always darkest before dawn". Are ASX lithium shares set to see daylight next year?

The nuts and bolts of lithium in 2025

Companies that make their money from commodities are heavily skewed by the supply and demand of the material. We've seen this play out over the last couple of years as the price of lithium has crumbled by almost nine-tenths of its former glory.

It then goes without saying that where the lithium price goes next year is pivotal.

Opinions are divided on this. According to The Australian Financial Review, analysts over at Morningstar think lithium carbonate prices can leap to US$15,000 per tonne, implying an approximate increase of 50% from today's level.

S&P Global Commodity Insight's forecast is a more conservative estimate. The market data provider expects lithium carbonate to hover between US$9,924 and US$11,627 per ton throughout 2025. At least that would suggest no gut-wrenching falls over the next 12 months.

The team at UBS believes prices for the less-lithium-rich spodumene could rally 17% in 2025. It comes with the caveat that miners need to delay further growth projects for prices to rise, which may not pan out.

All price forecasts aside, UBS' point is an important one. The fate of the lithium sector for next year really boils down to one thing: Will demand exceed supply? For this to occur, either demand for lithium — predominantly from EVs — will need to surge or more producers will need to close their mines.

If more miners close and battery demand grows, the price of lithium could be off to the races.

Which ASX lithium shares are in the box seat?

Assuming the sector prospers, then it becomes a matter of owning the quality lithium companies.

Mineral Resources could prove a winner if Morningstar's team is on the money. The team are optimistic about the besieged mining services company reaching $64, an 81% upheaval in its share price if accomplished.

What about short-sellers' delight, Pilbara Minerals?

Canaccord Genuity has a $3.90 price target on Pilbara shares. Based on the current price of this ASX lithium share, there could be a 60% upside for this $7.3 billion lithium heavyweight. Even the lowest price target of $2.70 from Jefferies suggests ~11% worth of gains to be made in the year ahead.

Should you invest $1,000 in Igo Ltd right now?

Before you buy Igo Ltd shares, consider this:

Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Igo Ltd wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

And right now, Scott thinks there are 5 stocks that may be better buys...

See The 5 Stocks *Returns as of 30 April 2025

Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Materials Shares

A bricklayer peers over the top of a brick wall he is laying with a level measuring tool on top and looks critically at the work he is carrying out.
Materials Shares

Brickworks shares have surged 15% in a month. Are they still good value according to Macquarie?

Here's what this broker has to say about the stock.

Read more »

A man checks his phone next to an electric vehicle charging station with his electric vehicle parked in the charging bay.
Materials Shares

Are Pilbara Minerals shares too cheap to ignore?

A leading broker has given its verdict on this beaten down lithium miner.

Read more »

An unhappy man in a suit sits at his desk with his arms crossed staring at his laptop screen as the PointsBet share price falls
Materials Shares

Does Macquarie rate James Hardie shares a buy, hold or sell?

The company is set to report FY25 earnings this week.

Read more »

Man with rocket wings which have flames coming out of them.
Materials Shares

Why is the Core Lithium share price jumping 19% today?

Something is getting investors excited. Let's find out what it is.

Read more »

A woman holds up hands to compare two things with question marks above her hands.
Financial Shares

Which is better value right now, Soul Patts or Brickworks shares?

Let's dive in and see what the experts have to say.

Read more »

A smiling businessman in the city looks at his phone and punches the air in celebration of good news.
Materials Shares

Core Lithium shares charge higher on big news

This lithium miner is starting the week strongly. But why?

Read more »

Lion roaring in the wild, symbolising a rising Liontown share price.
Materials Shares

Why did the Liontown share price rip 19% higher today?

This ASX lithium share was the fastest riser of the ASX 200 today.

Read more »

A female miner wearing a high vis vest and hard hard smiles and holds a clipboard while inspecting a mine site with a colleague.
Materials Shares

Why are Fortescue shares charging higher today?

What is getting investors excited today? Let's find out.

Read more »