Citi cuts lithium price outlook on weaker demand

Arundhati Sarkar

• Citigroup lowered its lithium price forecasts for the next two years, citing slowing battery demand growth, heightened trade uncertainty and broader macroeconomic headwinds.
• Citi cut its three-month lithium carbonate and hydroxide price targets to $12,000 a ton from $20,000 and $17,000, respectively, while reducing its spodumene forecast to $1,200 from $2,000. The bank also lowered its estimates for all three battery ingredients through the end of 2028.
• “With supply expected to improve in 2027 and uncertainty around next year’s demand elevated, consumers are likely to defer purchases and maintain lean inventories,” the bank said in the note released Friday, according to Bloomberg.
• “Sentiment and positioning are likely to remain the dominant drivers in the near term, keeping risks skewed to the downside.”
• The most-active lithium carbonate contract on the Guangzhou Futures Exchange rose 1.2% to 91,160 yuan ($13,710) a ton on Monday. It’s shed more than 40% since the end of August.
• Concerns over battery demand have intensified following plans to restrict Chinese hybrid-vehicle exports to the EU and Beijing’s decision to phase out certain tax incentives. Goldman Sachs forecast last month that the lithium market would move from a deficit to near balance in the current quarter, before shifting into surplus over the next two years.
• CATL’s (CYATY) Jianxiawo lithium mine in Jiangxi, shut since last August, received local environmental approval on Friday, sending the battery maker’s shares up as much as 4.2% in Shenzhen on Monday.
• ETFs: (LIT), (BATT), (REMX)

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