Finance1 min read

Citi Cuts Lithium Forecasts on Worsening Battery Demand Outlook

By · Published by Everything Blog

In short

The revision highlights an industry-wide "lithium reset" triggered by broader macroeconomic instability and sluggish electric vehicle uptake. European Union trade restrictions targeting Chinese hybrid-vehicle exports, alongside Beijing's removal of specific tax benefits, have materially diminished storage and automotive consumption. Furthermore, supply dynamics are shifting as Goldman Sachs projects the market will transition from near balance this quarter into consecutive annual surpluses.

Key points

  • Anticipated market surpluses over the next two years will likely incentivize industrial c…: Anticipated market surpluses over the next two years will likely incentivize industrial consumers to maintain minimal lithium inventories.
  • Heightened trade barriers between China and the European Union are actively curbing globa…: Heightened trade barriers between China and the European Union are actively curbing global electric vehicle battery demand.
  • Resumed mining operations in China threaten to introduce additional supply just as global…: Resumed mining operations in China threaten to introduce additional supply just as global manufacturing demand continues to weaken.

Sources checked by our analysis pipeline: 1

(Bloomberg) -- Citigroup Inc. cut its price targets for lithium for the next two years, citing concerns over a slowdown in battery demand growth, rising trade uncertainty and broader macroeconomic headwinds.

Fears of demand deterioration for the metal next year have triggered a “lithium reset,” it said in a note by analysts including Shreyas Madabushi, warning that prices will 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,” the bank said in the note released Friday. “Sentiment and positioning are likely to remain the dominant drivers in the near term, keeping risks skewed to the downside.”

Citi 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.

The most-active lithium carbonate contract on the Guangzhou Futures Exchange rose 1.2% to 91,160 yuan ($13,710) a ton in…

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