ASX 200 lithium shares have soared ahead in 2022, but how will lithium prices impact their fortunes in the future?
Lithium shares on the S&P/ASX 200 Index (ASX: XJO) include Pilbara Minerals Ltd (ASX: PLS), Allkem Ltd (ASX: AKE) and Core Lithium Ltd (ASX: CXO). Sayona Mining Ltd (ASX: SYA) is a recent addition to the ASX 200.
The Office of the Chief Economist has recently revealed its lithium price predictions. So what is the outlook?
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Lithium prices tipped to rise, then ease
Pilbara Minerals shares have risen 62% in the year to date, while Allkem shares have soared 37%. Core Lithium shares have surged 95% this year so far, while Sayona shares have rocketed 73%.
The price of lithium impacts the earnings of ASX lithium shares, particularly those that are producing or planning production soon.
Lithium prices will rise in 2022 and 2023 before easing in 2024, a Resources and Energy September quarterly report predicts.
The report predicts spodumene prices will jump from an average of US$598 a tonne in 2021 to US$2,730 a tonne in 2022. In 2023, spodumene prices are tipped to soar to US$3,280 a tonne before easing to US$2,490 a tonne in 2024.
Meanwhile, lithium hydroxide prices are forecast to increase from US$17,370 a tonne in 2021 to US$38,575 a tonne in 2022. In 2023, lithium hydroxide prices are tipped to soar to US$51,510 before pulling back to US$37,650 in 2024.
The report stated:
World demand for lithium is estimated to increase from 583,000 tonnes of lithium carbonate equivalent (LCE) in 2021 to 724,000 tonnes in 2022.
Asia remains the major source of demand for lithium, despite the spread of new battery manufacturing capacity into Europe and the US.
Global electric vehicle sales soared 26% in the 2022 financial year, the report noted. Chinese sales surged 110%, European sales rose 6% and North American sales lifted 27%.
UBS rates the Allkem share price as a buy but has recently recommended investors sell Pilbara Minerals shares.
ASX 200 lithium share price snapshot
In the past year, Allkem shares have lifted 69%, while Pilbara shares have exploded 153%.
Sayona Mining shares have risen 50% in a year, while Core Lithium shares have charged 140% higher.
