Shall we send a strong message at the next AGM?, page-21

As I said, short term it looks pretty bad for lithium prices and I really wonder what price we have established for carbonate in our DFS.

According to the latest analysis from Goldman Sachs (courtesy of The Australian Financial Review) investors can expect the global lithium market to be in a 202,000 tonne surplus in 2024.

The broker's commodities analysts noted this "represents 17% of global demand". Therefore, they said they "expect prices to trade deeply into the cost curve to balance the market".

According to Goldman's analysts:

In this context, we maintain our bearish view on the lithium market and lower our 12-month target for China Lithium Carbonate (excluding VAT) to US$11,000 a tonne and CME Asia CIF Lithium Hydroxide to US$12,000/t (from US$15,000/t and US$16,500/t respectively previously).

Lithium carbonate was trading for just over US$16,000 per tonne on Friday.

Among the headwinds facing the lithium price, and by connection ASX 200 lithium shares, Goldman Sachs cited a marked decline in Chinese lithium battery demand volume growth.

"The rise in chemical output has overtaken the growth in China battery output and China's imports of spodumene concentrate (+60 per cent y/y YTD) – particularly from Australia and Zimbabwe – have continued to grow sharply," the analysts said.

They concluded:

At the same point, there remains little evidence of supply rationing, with only an estimated 40kt [kilotonne] of supply loss over the past 12 months due to cost pressures. However, with the market largely balanced year to date, the full extent of supply-led surplus is yet to be realised, with prices still 33% above the top-end of the integrated cost curve.

With lithium prices potentially facing another significant slide in 2024, I expect we'll be hearing more about cost-cutting measures from ASX 200 lithium shares in the year ahead.