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Trump's China Truce Shook Lithium Stocks — Now JPMorgan Says Lithium Americas Is Fairly Priced

Benzinga·11/06/2025 18:09:42
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Lithium investors just got a reminder that geopolitics can move markets faster than demand forecasts. After a months-long retail-fueled rally, Lithium Americas Corp. (NYSE:LAC) has plunged 45% over the past month — a collapse JPMorgan's Bill Peterson partly attributes to "shifting rhetoric from the Trump administration regarding US-China relations" and China's move to lift export restrictions on key minerals.

When A Truce Turns Into A Shock

China's decision to relax curbs on rare earths, gallium, graphite, and other critical inputs defused supply fears that had powered lithium stocks all summer. The result: a brutal reset across the sector.

Standard Lithium Ltd (AMEX:SLI) tumbled 21%, Sigma Lithium Corp (NASDAQ:SGML) dropped 32%, and even heavyweight Albemarle Corp (NYSE:ALB) barely held flat, slipping 0.08%. LAC led the rout, its speculative surge unwinding as fast as it rose.

Read Also: Uncle Sam ETF? Trump Quietly Builds A Portfolio In Intel And Lithium Americas

JPMorgan Steps Off The Sidelines

Peterson, who downgraded LAC in October at the height of the hype, upgraded the stock back to Neutral, saying shares now "appear fairly valued" after the selloff.

He still calls Thacker Pass "a flagship U.S. lithium asset," backed by low-cost debt and offtake potential with General Motors Co (NYSE:GM). The valuation now sits near 1x NPV — down from roughly 2x just weeks ago — a level he says "more appropriately balances execution risk and tightening supply-demand fundamentals."

A Market Cooled, Not Canceled

JPMorgan's metals team now expects lithium to enter deficit by 2025, pushing its forecast forward by four years, with battery-grade carbonate prices seen holding near $15,000 per ton in the long term.

The lithium story isn't over — it's just growing up. After a 200% rally and a 45% reality check, LAC may finally be priced for fundamentals rather than fever dreams.

In short: Donald Trump's truce cooled the temperature, but the lithium fire's still burning underneath.

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Image: Shutterstock