Analysts at Macquarie believe in the valuation upside for all lithium mines in spite of the recent decline in spot prices.

They continue to favor Pilbara Minerals (ASX:PLS) among Australia-based lithium producers.

This preferential treatment is also extended to Patriot Battery with its promising near-term exploration prospects.

They see value in Australia’s Allkem and Liontown Resources, which offer exposure to lithium brines in South America and spodumene concentration in Australia.

The production rate and market share of non-integrated lithium refineries will be the determinant of supply side flexibility in a lower-price environment, according to the analysts, given the falling lithium carbonate prices globally.

The perceived underperformance of Australian lithium miners is viewed by Macquarie as a buying opportunity for investors seeking to increase their exposure to critical minerals.

Pilbara Minerals is a major mining company specializing in lithium and tantalite mining.