Despite its drastic plunge over the past year, lithium is expected to rise back up in 2024.
That is according to the financial firm Canaccord Genuity Corp. (TSX: CF). The investment banking company expects the price of lithium chemicals and spodumene concentrates to shoot up significantly, sources reported Friday.
Specifically, Canaccord has estimated that the value of lithium chemicals needed for batteries and other goods will ascend by about 6.6 per cent to US$16,000 per tonne. Meanwhile, the firm predicts that the price of spodumene concentrates will rise by 8.6 per cent to US$1,200 per tonne by July.
The analysts say an accelerating rate of electric vehicle and battery production will be significantly responsible for its ascension.
Others, like the Executive Director of Greentech Metals Ltd (ASX: GRE) Thomas Reddicliffe, share the same sentiment.
“We think the lithium sector has been oversold and the lithium price will come back and when it does will be reflected in the value of explorers,” Reddicliffe told Australia’s Herald Sun.
The value of the commodity has dropped by about 80 per cent since the spring of 2023. This sharp decline prompted companies like Albemarle Corporation (NYSE: ALB), Core Lithium (ASX: CXO), Piedmont Lithium (Nasdaq: PLL) and Sayona Mining (OTC: SYAXF) to lay off workers, cut costs and halt production at certain operations.
📈After months in the doldrums, could the global #lithium wheel be finally turning? Buoyed by spot price spikes and a surprise battery production hike, things are looking up for #lithium@InvestorStream_ FULL VIDEO: https://t.co/PNBINBE163 $GRE $GRE.ax pic.twitter.com/GnxIjS7YSX
— GreenTech Metals (@GreenTechMetals) March 11, 2024
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Goldman Sachs isn’t so optimistic
The major American bank thinks the bear market will continue for some time and that it is too early to be declaring an end to it.
Goldman Sachs says the outlook for nickel, copper and cobalt isn’t looking positive in the near-term either.
“Despite the significant downside in battery metals prices, with nickel, lithium and cobalt prices down 60 per cent, 80 per cent and 65 per cent from cycle peak, respectively, we believe it is too early to call a decisive end to these respective bear markets,” the bank’s analyst Nicholas Snowdon said.
The New York bank expects the value of lithium carbonate to slide by 25 per cent to about US$10,000 per metric ton within the next 12 months.
Despite these predictions, many believe the market for lithium and other battery metals will flourish in the long run due to certain factors. The phase out of CO2-emitting vehicles among many nations is one of the most significant.
Lithium South Development Corporation is a sponsor of Mugglehead news coverage
rowan@mugglehead.com
