In AFR this morning:Citi cuts lithium price forecastsCiti has...

In AFR this morning:

Citi cuts lithium price forecasts
Citi has warned there is more pain to come for lithium prices in China amid softer demand for electric vehicles.

While prices in China have already retreated 30 per cent since the beginning of this year, the broker believes they will remain under pressure until at least the end of the first quarter.

“We believe the bear run in lithium prices is likely to continue for a few more weeks before stabilising,” Citi analysts said.

The broker slashed its three-month price target for lithium carbonate to $US40,000 a tonne, from $US60,000 a tonne, and lowered its six to 12 month target to $US50,000 a tonne, from $US55,000 a tonne.

Investors remained concerned about the prospects for EV demand in China, especially after the country ended subsidies for EV purchases at the beginning of the year, Citi said.

In addition, weak January EV sales have exacerbated the situation, driving destocking by battery and cathode producers of inventory accumulated over the last two years.

Citi said it saw scope for prices to stabilise from the second quarter of this year as battery producers restock.

“Most of the large battery producers have strong production plans for 2023 which suggests battery companies are likely to restock from the second quarter onwards,” Citi said.