Brokers say lithium price could halve by 2023 but Core Lithium disagrees. Here’s why

The company is developing the Northern Territory’s Finniss Lithium Project.

| More on:
A wide-smiling businessman in suit and tie rips open his shirt to reveal a green t-shirt underneath

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • The Core Lithium share price is tumbling today, falling 5% to trade at $1.20
  • That's despite reports the company's CFO is confident the company's Finniss Lithium Project will turn a profit even if the commodity's price drops
  • Brokers are still warning of an upcoming fall in the price of lithium, with Credit Suisse reportedly tipping it to halve by the end of 2023

The future of the price of lithium could vastly different that previous expected, according to one top broker. However, ASX lithium favourite Core Lithium Ltd (ASX: CXO) isn’t worried.

The company’s chief financial officer Simon Iacopetta is reportedly bullish on lithium prices. He’s also confident of the company’s profitability, even if prices drop.

At the time of writing, the Core Lithium share price is $1.20. That’s 5.16% lower than its previous close and 14.29% lower than it was at the end of last week.

For context, the broader market is also in the red on Thursday. Right now, the S&P/ASX 200 Index (ASX: XJO) is slumping 0.9% while the All Ordinaries Index (ASX: XAO) has fallen 0.96%.

Let’s take a closer look at Core Lithium’s outlook for lithium prices.

ASX lithium developer optimistic despite bearish brokers

A burgeoning supply of lithium could cause demand for the ‘white gold’ to fall over the next 18-months, causing the materials’ price to halve. That’s according to Credit Suisse. The broker is expecting lithium spot prices to slip to US$2,500 by the end of 2023, reports ABC News.

It comes after Goldman Sachs released its own bearish note on the near-term future of lithium last week. The note was likely one reason behind a sell-off among ASX lithium shares.

The brokers’ predictions come on the back of more companies looking to profit on the lithium boom by ramping up production.

One such company is ASX materials share, Core Lithium. It’s focused on developing the Finniss Lithium Project in the Northern Territory.

Iacopetta reportedly told the publication the company was expecting a brighter future for the battery-making material’s price than many brokers. He was quoted as saying:

We expect the shortfall of supply or new products coming to market to result in a continued strengthening of [prices] for the near term … We should be selling into a fairly positive price environment and generating healthy margins.

A recent update from Core Lithium stated the mine’s first production was on schedule to be delivered before the end of the year.

However, Iacopetta reportedly also noted the mine’s feasibility factored in realised prices of its spodumene concentrate lithium ore falling to $1,000.

Core Lithium share price snapshot

While the last fortnight has been rough on the Core Lithium share price, it’s still trading on notable long-term gains.

It’s currently nearly 90% higher than it was at the start of 2022. Shares in the lithium miner have also gained close to 360% since this time last year.

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Materials Shares

a man in a hard hat and high visibility vest smiles as he stands in the foreground of heavy mining equipment on a mine site.
Materials Shares

‘Thrilled’: Why this ASX critical minerals share surged 30% on Monday

What's impacting this critical minerals explorer today?

Read more »

a woman wearing a dark business suit holds her hand up in a stop gesture while sitting at a desk. She has a sombre look on her face.
Materials Shares

Why is the Province Resources share price still halted?

The green hydrogen company has requested an extension to its trading halt today.

Read more »

A group of business people cheering.
Materials Shares

Why are ASX lithium shares having such a cracking start to the week?

What's impacting ASX lithium shares on Monday?

Read more »

Two people shaking hands in the boardroom on a merger.
Technology Shares

Guess which ASX All Ords share just inked a new deal with Fortescue

Sadly, the deal hasn't been enough to save the ASX All Ordinaries share from the red.

Read more »

Rising rocket with dollar signs.
Materials Shares

What’s boosting the Allkem share price on Monday?

Allkem is making some changes.

Read more »

A person wears a roaring lion mask.
Materials Shares

Why is the Liontown share price leaping 5% on Monday?

Why are Liontown shares on fire this Monday?

Read more »

a woman wearing a hard hat and high visibility vest checks her device in front of a large spool of steel cable.
Earnings Results

Bluescope share price lifts 5% on record earnings

The company has announced big increases in profits and cash flow.

Read more »

A woman shrugs and pulls awkward expression with her face.
Materials Shares

Is Novonix considered an ASX lithium share?

Can Novonix be considered an ASX lithium stock?

Read more »