Citigroup Inc. has significantly reduced its lithium price forecasts for the next two years, citing concerns over a slowdown in battery demand growth, rising trade uncertainty and broader macroeconomic headwinds. According to reports from Bloomberg, the bank 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.
As reported by Bloomberg, fears of demand deterioration for lithium next year have triggered what the bank calls a "lithium reset," with prices expected to remain depressed in the near term. "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," Citi analysts including Shreyas Madabushi stated in their note. The bank warned that "sentiment and positioning are likely to remain the dominant drivers in the near term, keeping risks skewed to the downside."
According to Bloomberg reports, the most-active lithium carbonate contract on the Guangzhou Futures Exchange rose 1.2% to 91,160 yuan ($13,710) a ton in the morning session. However, the contract has shed more than 40% since the end of August, reflecting the significant volatility in lithium prices amid the current market uncertainty.
As reported by Bloomberg, Goldman Sachs Group Inc. forecast last month that the lithium market will shift from a deficit to near balance this quarter, followed by surpluses over the next two years. The fate of Contemporary Amperex Technology Co. Ltd.'s Jianxiawo mine in China's Jiangxi province has been a significant driver of lithium prices since it was shut last August. According to Bloomberg, CATL's share price rose as much as 4.2% in Shenzhen on Monday after the battery maker received environmental approval from the local government for the project.
