Expect a sharp correction for lithium prices
The Wall Street bank said there will be a “sharp correction” in lithium prices, with the metal averaging under $54,000 a tonne this year, down from a spot price of over $60,000.
It’s expected to fall further to an average of just over $16,000 in 2023.
Cobalt will probably drop to an average of $59,500 a tonne next year from roughly $80,000 now.
And nickel is likely to rise almost 20% over the rest of this year to $36,500 a tonne before “fundamental pressures” drive it lower again.
Benchmark Minerals Intelligence agrees, flagging that buyers in Europe and North America are employing a watch-and-wait strategy for spot market purchasing in response to recent bearish developments in China – subsequently limiting international market activity and softening spot prices marginally to between $65,000-75,000/tonne for both carbonate and hydroxide.
Prices could soar again after 2024
But Goldman Sachs did highlight that prices could soar again after 2024.
“This phase of oversupply will ultimately sow the seeds of the battery materials super cycle over the second half of this decade,” they said.
Then “the demand surge will more sustainably overcome current supply growth.”
S&P Global Market Intelligence expects lithium raw material supply is likely to improve especially from the September quarter onward, when the bulk of this year’s new additions is scheduled to reach the market.
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The lithium market is likely to return to a deficit from 2024, which is forecast to deepen over 2024-26, as demand growth once again outpaces that of supply.
