Energy
Tuesday, March 5th, 2024 3:28 pm EDT
Key Points
- Battery metal prices expected to stay low despite recent drops: Goldman Sachs predicts battery raw material prices like nickel, lithium and cobalt will stay low for a while, despite a recent significant decline. They believe supply will outpace demand due to existing supply pipelines and lower-than-expected electric vehicle demand.
- Large supply surpluses predicted for lithium and nickel in 2024: Goldman Sachs points to a significant supply pipeline for lithium and nickel, resulting in a surplus in 2024. This excess supply, on top of weaker electric vehicle demand forecasts, is likely to keep prices down.
- Goldman Sachs forecasts further price drops for cobalt, nickel and lithium carbonate: Goldman Sachs expects cobalt to trade around $26,000 per metric ton, nickel to fall to $15,000 per metric ton, and lithium carbonate to drop to $10,000 per metric ton over the next year. This aligns with current market trends, where lithium carbonate prices are already down nearly 70% compared to last year.
Goldman Sachs expects battery raw material prices to stay low for a while, despite recent significant price drops. This forecast is based on a research note published on Tuesday, which comes after a major decline in prices for key battery metals like lithium, nickel, and cobalt. These metals are used in electric vehicles, wind turbines, and solar panels.
Goldman Sachs believes the outlook is particularly bearish for nickel, lithium, and cobalt. Even though prices have significantly dropped – down 60% for nickel, 80% for lithium, and 65% for cobalt from their peak – Goldman Sachs warns it’s too early to say the price slump is over.
They point to supply cutbacks as a reason for the recent price dips. But because there’s a “significant” supply pipeline in the works, Goldman Sachs believes there will still be a surplus of lithium and nickel in 2024. This excess supply, combined with lower than expected demand for electric vehicles in Western countries, is likely to keep prices down.
Goldman Sachs predicts that over the next 12 months, cobalt will trade around $26,000 per metric ton (down from their previous forecast of $28,000), nickel will fall to $15,000 per metric ton, and lithium carbonate will drop to $10,000 per metric ton (down from $11,000).
This aligns with current market trends. For example, lithium carbonate prices in China are already down nearly 70% compared to last year.
Other analysts agree that the outlook for battery metals is gloomy. UBS, for instance, expects lithium and nickel markets to stay sluggish due to excess supply. They believe lower battery metal prices could benefit automakers by reducing battery costs.
For the full original article on CNBC, please click here: https://www.cnbc.com/2024/03/05/goldman-the-bear-market-for-battery-metals-prices-is-far-from-over.html
