Citi lowers lithium price targets due to battery demand concerns
Citigroup analysts warned that lithium prices will stay low because of slowing demand growth and trade uncertainty.
Citigroup Inc. has reduced its price forecasts for lithium for the next two years, according to a report by Mint. Analysts, including Shreyas Madabushi, stated that a slowdown in battery demand growth, macroeconomic headwinds, and rising trade uncertainty have triggered a lithium reset.
The bank noted that prices are expected to remain depressed in the near term. Analysts said consumers may delay purchases and keep lean inventories because supply is expected to improve in 2027 and demand for next year remains uncertain.
Citigroup lowered its three-month price targets for lithium carbonate to $12,000 a ton from $20,000, and hydroxide to $12,000 a ton from $17,000. The spodumene forecast was also reduced to $1,200 from $2,000.
The bank further lowered estimates for all three battery ingredients through the end of 2028. This comes as the lithium carbonate contract on the Guangzhou Futures Exchange rose 1.2% to 91,160 yuan ($13,710) a ton, despite shedding more than 40% since the end of August.
Recent concerns regarding demand for car batteries and energy-storage systems include Beijing's phase-out of some tax benefits and a plan to limit Chinese hybrid-vehicle exports to the European Union.