Citi predicts a +20% to +25% rise in lithium prices over the next2-to-3months on supply curtailmentafter CATL suspended operations of its lepidolite mines accounting for about 6% of total LCE supply.
“We expect investors, both inside and outside of China, to cover their shorts over the coming weeks on the back of recent supply curtailments from CATL’s lepidolite cuts, inventory drawdowns, and seasonal peak demand,”
Citi said that lithium fundamentals have been extremely bearish over the past year, and alongside this,short positions appear to have built on GFEX and Comex. Recent closures and some re-stocking have seen the Chinese lithium market balance up in recent weeks and thevCATL curtailment should to see the market running a small deficit over the next 2-3 months.
“We are likely to see investors cover their short positions and prices rally to $US13,000-$US14,000 a tonne on COMEX, up from around $US11,000 at present,” McCutcheon says.
Citi therefore lifts its0-3mth targets for lithium salts, to $US14,000 for carbonate and $US14,200 a tonne for hydroxide,from$US10,000 a tonne.
