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Citi says high lithium prices are here to stay and could hit $60k per tonne

• Citigroup ups forecasts to $60,000/t for battery-grade carbonate

• INF produces increased volumes of battery grade lithium carbonate and hydroxide

• AVZ commits $25m to Manono exploration

All your ASX lithium news for Thursday, February 10.

Citigroup has substantially upgraded its lithium forecasts to US$60,000 per tonne for battery-grade carbonate.

The investment bank said this was off the back of higher EV production and sales expectations and resulting tighter short-medium term market balances.

“There may not be sufficient inventory to allow the deficit we model for the lithium market during 2022, meaning extreme lithium pricing is likely to be required to defer and/or destroy demand,” Citi said.

This means further increases on a commodity that soared a massive 486% over the last year.

“We forecast an extreme lithium deficit equivalent to 6% of supply during 2022, equivalent to an oil market deficit of ~6md/d and a copper deficit of >1mt,” Citi said.

“EV sales are reaching the point of critical mass and we see ~10.7m EV during 2022 driving a 160k/t y/y, or 30% y/y increase in lithium demand.

“We see the same strong demand growth during 2022 whether using EV output or battery supply chain capacity to estimate lithium demand.”

Citi says that even its bull case for supply doesn’t see the market rebalancing until a year from now.

In a sign of how quickly things are moving in lithium, we have a new forecast out this morning from Oliver Nugent and team at Citi, anticipating that demand will hit 1.3 million tons of LCE in 2025, a 16.5% jump over their prior forecast.


Who’s got news out today?

AVZ Minerals

The company has committed $25 milly from its recent $75m cap raising to an early works and exploration drilling program for its Manono lithium and tin project in the Democratic Republic of Congo.

AVZ says around $19m will fund the early works program in the second half of the 21-22 financial year, with $6m to fund extension drilling at Roche Dure.

“This decision demonstrates the Board’s confidence of receiving the support required to make the development of the Manono Project a reality and importantly, should maintain our project development timetable despite the award of the mining licence taking longer than we had previously anticipated,” MD Nigel Ferguson said.

“The drilling program has the potential to add significant value with respect to expanding the reserve life of the Roche Dure deposit, whilst also identifying high grade ore zones for initial feed to the plant, providing increased SC6 production volumes from the start of operations.”




*To Remind what Simon says,




*Don't forget the Rin Tin Tin



*Hey hey that BFS is going to Blow us all away