The bank slashed its three-month lithium carbonate target to $12,000 a tonne from $20,000, citing slowing battery demand and trade uncertainty.
Citigroup has lowered its lithium price forecasts for the next two years. The bank pointed to slowing growth in battery demand, rising trade uncertainty and broader macroeconomic headwinds.
In a note by analysts including Shreyas Madabushi, it said fears that demand will deteriorate next year have set off a “lithium reset” and that prices will stay depressed in the near term, Bloomberg reported.
The cut covers the battery supply chain. Citi lowered its three-month price target for lithium carbonate to $12,000 a tonne from $20,000 and its lithium hydroxide target to $12,000 from $17,000. It also cut its spodumene concentrate forecast to $1,200 a tonne from $2,000. The bank lowered its estimates for all three materials through to the end of 2028, according to Investing.com, citing Bloomberg.
Buyers expected to hold back
The bank expects buyers to wait. “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 said in the note, which was released on Friday 30 October, according to Seeking Alpha’s account of the Bloomberg report.
The bank added that “sentiment and positioning are likely to remain the dominant drivers in the near term, keeping risks skewed to the downside.”
Policy changes are adding to the demand worries. These include a proposal to restrict exports of Chinese-made hybrid vehicles to the European Union and the phase-out of some tax incentives in China, Investing.com reported. Lithium carbonate futures on the Guangzhou Futures Exchange edged higher in Monday morning trading but were still more than 40% below their late-August level, according to the same report.
Miners slide in Australia
Australian lithium stocks fell on Monday, 2 November, with smaller miners leading the losses as investors weighed a weaker demand outlook and expectations of more supply, Investing.com reported.
Argosy Minerals and Core Lithium were among the biggest decliners. Liontown and PLS Group both fell to match their 52-week lows, according to Investing.com. In the US, the Global X Lithium & Battery Tech ETF was the main fund tied to the news, Seeking Alpha noted.
A contrast with producers’ plans
The more cautious outlook comes as major lithium producers keep pushing ahead with large capacity expansions based on long-term consumption growth, industry coverage noted. That leaves the market caught between near-term oversupply risk and bets that electric vehicles and energy storage will eventually absorb the new supply. For now, Citi expects sentiment to drive prices more than fundamentals do.
Citi cuts lithium forecast: Australian miners slide
