Morgan Stanley: The lithium market is expected to remain tight

The bank stated that China's pure electric vehicle sales in May rebounded significantly, increasing by 13% month-on-month. Morgan Stanley also highlighted the strong global growth in energy storage system shipments and the momentum of truck electrification in China. However, with the support of rising prices, lithium supply is also expected to recover. Morgan Stanley emphasized the resumption of lithium exports from Zimbabwe and the restart of several mines in Australia, adding that brownfield expansion projects are also emerging. The bank maintains a neutral rating on PLS in Australia, favoring PLS over peer IGO. Morgan Stanley rates IGO as underweight, citing risks related to the Greenbushes mine life plan and the CGP3 capacity ramp-up.