Lithium prices poised to continue lower, report says, but Janus sees bottom (NYSE:ALB)

Lithium costs aren’t anticipated to return to earlier excessive ranges reached in 2022 and early 2023 earlier than 2025 because of rising provide, subdued Chinese language demand and a lackluster U.S. electrical car market, Australia’s authorities mentioned in a current evaluation.

Australia, which mined about half the world’s lithium in 2022, forecasts the spot value of spodumene will fall to $2,200/metric ton in 2025 from an estimated common of $3,840/ton final 12 months, in accordance with the report from nation’s Division of Business, Science and Sources.

Australia is forecast to extend spodumene manufacturing to 633K metric tons in 2025 from 386K tons in 2022, China is predicted to greater than double output to 373K tons subsequent 12 months from 166K in 2022, and Chile is seen rising to 227K tons from 162K over the identical interval.

Decrease spot lithium costs might make electrical automobiles and batteries cheaper however they might additionally damage challenge funding and delay shopper acceptance.

However Janus Henderson Buyers sees lithium as considered one of its prime commodity bets for 2024, believing the pullback in lithium costs seems near a backside.

Daniel Sullivan, the agency’s head of world pure sources, thinks the lithium market might normalize within the early a part of this 12 months, creating situations for a restoration.

He additionally expects extra offers in lithium mining, particularly in Australia; M&A exercise price greater than US$1.3B was introduced within the nation’s lithium mining sector final 12 months, up from simply US$56.4M in 2022, and Sullivan expects “much more of that to occur.”

Doubtlessly related shares embody Albemarle (NYSE:ALB), Sociedad Quimica y Minera (NYSE:SQM), Arcadium Lithium (ALTM), Piedmont Lithium (PLL), Lithium Americas (LAC), Commonplace Lithium (SLI), Sigma Lithium (SGML), Ioneer (IONR).

ETF: (LIT)