Min and Lithium, page-153

https://thewest.com.au/business/min...ecast-picks-minres-igo-as-preferred-c-8205736

Barrenjoey upgrades lithium price forecast, picks MinRes, IGO as preferred

Stuart McKinnonThe West Australian
Mon, 12 September 2022 8:54AM
Stuart McKinnon


MinRes' Wodgina lithium mine in the Pilbara. Credit: MinRes

Sydney-based financial services firm Barrenjoey has become the latest market commentator to significantly upgrade its price forecast for lithium with expectations the market will remain tight until 2024.

In a research note, the company’s head of mining research Glynn Lawcock noted electric vehicle sales globally continued to outpace combustion vehicle sales, up 117 per cent year-to-date in China and 32 per cent in Europe.
“In our view, the key limiting factor to greater adoption remains the development of raw materials, particularly lithium,” he said.
“We think the market expects a surge in supply in 2023 which we would expect to be more tilted towards year-end and into 2024.”

Barrenjoey upgraded its price forecast for spodumene by a massive 86 per cent for 2023 to $US6500/t and 52 per cent to $US4030/t in 2024.
“Downstream we now forecast lithium carbonate and hydroxide prices of $US63,000/t for 2023 and $US45,000/t for 2024, upgrades of 57 per cent and 36 per cent respectively,” Dr Lawcock said.
“We expect supply tightness to ease from the current extreme levels of supply anxiety towards a more balanced market by 2026.
“Our long-term prices for spodumene of $US1100/t and lithium hydroxide of $US15,000/t are unchanged.”

Market forecasters have been scrambling to upgrade their price forecasts for lithium in recent months, as market tightness in the battery metal continues on the back of strong EV demand and limited global supply.

Barrenjoey said Mineral Resources and IGO were its preferred stocks in the sector, giving each an overweight sentiment.

It said Pilbara Minerals was its least preferred on valuation grounds but noted it offered the most leverage to near-term pricing.
“While lithium equities have outperformed peers, lifting 25-50 per cent year-to-date, we think more upside potential remains,” Dr Lawcock said.
“We don’t think the market is pricing in a continuation of robust lithium prices into financial year 2023 which we now forecast.”

MinRes shares were up $1.52, or 2.1 per cent, to $73.03 at 8.55am while IGO was up 19¢, or 1.3 per cent, to $14.50 and Pilbara was up 5¢, or 1.1 per cent, to $4.55.