Macquarie (the most bullish lithium broker) analysts anticipate the lithium market will begin to balance in 2026, with a meaningful improvement expected from 2027 onwards.
My Translation: Winter Hibernation. Lithium stock prices to dip from 2024 till the entirety of 2025, with recovery from the depths of 2025 in 2026.
Buy and Hold LT holders do not believe in Sell first to Buy back later. That's why LTR holders didn't take the super $3 takeover deal, they will continue to wait for $3 and above. But they may probably have to see 50c first and wait for years if it comes to fruition. Lithium carbonate prices held at the CNY 100,000 per tonne mark in June, trading in a tight range since dropping to two-year lows in December 2023 as the ongoing surplus of raw materials for electric vehicle battery manufacturers continued to dictate low prices across the sector. Lithium miners and producers continued to expand capacity and hunt for new reserves, magnifying expectations of oversupply amid the fallout of battery gluts due to government subsidies for firms across the supply chain. Additionally, hopes of eventual balance in the market drove Chile to signal it would aim to double output over the next decade. Further adding to the bearish pressure, the EU announced plans to hit Chinese EV producers with tariffs of up to 38% in response to subsidies-supported dumping. The measures added to sweeping tariffs from the US, which quadrupled duties on Chinese EVs to 100%, pushing against input materials for battery producers.
Lithium Carbonate @CNY 93500, the lowest it has been and has been making lower lows since early May.
Lithium stocks are in a world of pain as prices continue to unravel towards 90,000 yuan a tonne – a level not seen since August 2021, when Pilbara Minerals was trading at just 30 cents!
There's been plenty of analyst coverage of recent moves, with the latest from Wood Mackenzie suggesting prices could "remain under pressure between 2024-28".
Even Macquarie, a long-standing lithium bull, has recently turned bearish on the sector.
Last Friday, Macquarie significantly lowered its 2024-25 outlook for both spodumene (-24%/-35%) and lithium carbonate (-27%/-35%). This adjustment was attributed to short-term demand weakness and committed supply's inability to react. The analysts anticipate the market will begin to balance in 2026, with a meaningful improvement expected from 2027 onwards.
"The price declines in our lithium price deck have had a material impact on earnings and valuation for our coverage ... The major lithium miners (MIN, LTM, PLS, IGO) all have had their target prices reduced, with only LTM remaining on an Outperform recommendation given its floor contracts protecting it from the full force of price declines," the report said.
