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

Lithium costs usually are not anticipated to return to earlier excessive ranges reached in 2022 and early 2023 earlier than 2025 as a consequence of rising provide, subdued Chinese language demand and a lackluster U.S. electrical automobile market, Australia’s authorities stated in a latest evaluation.

Australia, which mined about half the world’s lithium in 2022, forecasts the spot worth of spodumene will fall to $2,200/metric ton in 2025 from an estimated common of $3,840/ton final yr, in line 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 yr 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 inexpensive however they might additionally harm challenge funding and delay shopper acceptance.

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

Daniel Sullivan, the agency’s head of world pure assets, thinks the lithium market might normalize within the early a part of this yr, creating circumstances 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 yr, 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), Customary Lithium (SLI), Sigma Lithium (SGML), Ioneer (IONR).

ETF: (LIT)