From The Motley FoolGoldman Sachs very negative on Lithium...

From The Motley Fool

Goldman Sachs very negative on Lithium prices through to 2027

There are two commodities that get a lot of attention from Australian investors – iron ore and lithium.

Hundreds of billions of dollars are invested in companies with exposure to these metals. As a result, their prices can have a big impact on the wealth of the nation.

But where are iron ore and lithium prices heading from here? Let's take a look and see what analysts at Goldman Sachs are forecasting for the coming years.

Lithium price forecast

It certainly has been a tough 12 months for owners of lithium stocks such as Core Lithium Ltd (ASX: CXO), Liontown Resources Ltd (ASX: LTR), and Pilbara Minerals Ltd (ASX: PLS). They have underperformed due to significant weakness in the lithium price.

But will this weakness soon ease or are things going to stay the same way? Let's now take a look at what Goldman Sachs expects.

As a reminder, the current spot price of lithium carbonate in China is US$13,547 a tonne. This is down from the 2022 average of US$63,232 and the 2023 average of US$32,694 a tonne.

Goldman expects the following for lithium carbonate:

• 2024: US$11,106 a tonne
• 2025: US$11,000 a tonne
• 2026: US$13,323 a tonne
• 2027: US$15,646 a tonne

There are of course multiple types of lithium, so now let's take a look at the price of spodumene.

The current spot price of lithium spodumene is US$1,210 a tonne. This is down from the 2022 average of US$4,368 and the 2023 average of US$3,712 a tonne.

Goldman expects the following for lithium spodumene:

• 2024: US$928 a tonne
• 2025: US$800 a tonne
• 2026: US$978 a tonne
• 2027: US$1,155 a tonne

As you can see above, it seems that Australian lithium miners are going to have to get used to lithium prices trading around current levels for the foreseeable future.