Why lithium prices could be 'higher for longer': Macquarie

We take a look at the outlook for the lithium price.

| More on:
A group of three men in hard hats and high visibility vests stand together at a mine site while one points and the others look on with piles of dirt and mining equipment in the background.

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

  • ASX 200 lithium shares rising today include Core Lithium and Pilbara Minerals 
  • Macquarie analysts are tipping supply issues to impact the lithium price 
  • In today's quarterly report, Argosy also highlighted market optimism about the lithium price 

Lithium prices could remain elevated for longer, according to analysts at Macquarie equities.

ASX 200 lithium explorers include Pilbara Minerals Ltd (ASX: PLS), Mineral Resources Ltd (ASX: MIN), Core Lithium Ltd (ASX: CXO) and IGO Ltd (ASX: IGO).

Pilbara shares are rising 2.14% today, while Core Lithium shares are leaping 4.20%. Mineral Resources shares are climbing 0.02%, while IGO shares are descending 0.63%.

Let's take a look at the outlook for the lithium price.

What's ahead?

Lithium prices can weigh on company earnings, hence the share price of ASX 200 lithium shares.

Analysts at Macquarie Bank Ltd (ASX: MQG) are optimistic lower lithium supply amid development delays and capex upgrades could be a positive for the lithium price, The Australian reported.

Macquarie's team is positive on ASX 200 lithium shares Mineral Resources and IGO, while it is also impressed with Pilbara's "full lithium exposure" via its Pilgangoora operation in WA.

Commenting on lithium supply, the Macquarie equities team said:

A struggling lithium supply could keep lithium prices higher for longer, a silver lining for the lithium industry.

Pilbara delivered a 10% increase in spodumene concentration production in the December quarter to 162,151 dry metric tonnes, as my Foolish colleague James reported last week.

Meanwhile, Argosy Minerals Limited (ASX: AGY) has shared an upbeat outlook for lithium in today's quarterly activities report.

In comments today, Argosy highlighted the "growing expectations across the market that supply will remain tight over 2023".

Significant growth in EV sales remains the most material driver for future lithium demand.

Share price snapshot

Pilbara Minerals shares have surged 56% in the last year, while Core Lithium shares have soared nearly 61%.

IGO shares have leapt 33% in the last year, while Mineral Resources shares have exploded 71%.

For perspective, the S&P/ASX 200 Materials Index (ASX: XMJ) has soared nearly 14% in the last year.

Motley Fool contributor Monica O'Shea has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Macquarie Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Resources Shares

a sad looking engineer or miner wearing a high visibility jacket and a hard hat stands alone with his head bowed and hand to his forehead as he speaks on a mobile telephone out front of what appears to be an on site work shed.
Resources Shares

Down 14% in 2024, why is the BHP share price sliding again today?

ASX 200 investors are bidding down the BHP share price on Wednesday.

Read more »

A mining employee in a white hard hat cheers with fists pumped as the Hot Chili share price rises higher today
Resources Shares

These ASX 200 mining stocks could rise 40% to 50%

Analysts think these miners are dirt cheap at current levels.

Read more »

Image from either construction, mining or the oil industry of a friendly worker.
Resources Shares

Fortescue share price leaps 5% as electric machinery makes a milestone

Fortescue is charging ahead with its electric mining ambitions.

Read more »

rising mining asx share price represented by happy woman miner in hard hat
Resources Shares

Why the BHP share price crushed the benchmark this week

BHP shareholders enjoyed a rewarding week.

Read more »

A man wearing a hard hat and high visibility vest looks out over a vast plain where heavy mining equipment can be seen in the background.
Dividend Investing

Here is the profit forecast to 2026 for BHP shares

Let’s unearth how much profit this miner could make.

Read more »

Female miner standing next to a haul truck in a large mining operation.
Resources Shares

Is the worst of the selling now over for ASX iron ore shares?

ASX iron ore giants like BHP, Rio Tinto and Fortescue rebounded this week after falling hard in 2024.

Read more »

Three satisfied miners with their arms crossed looking at the camera proudly
Resources Shares

Why are ASX 200 mining shares smashing the benchmark on Wednesday?

Rio Tinto, BHP and Fortescue shares are all charging higher today.

Read more »

Two miners standing together.
Resources Shares

Why is the South32 share price getting battered today?

ASX 200 investors are bidding down South32 shares today.

Read more »