If you're a shareholder of one of the many ASX lithium shares trading on the Australian share market, then will no doubt be interested in where the price of the battery-making ingredient is heading.
Particularly given how the price of the white metal has a major impact on the valuation of lithium miners, developers, and explorers such as Allkem Ltd (ASX: AKE), Core Lithium Ltd (ASX: CXO), and Pilbara Minerals Ltd (ASX: PLS).
Where are lithium prices going from here?
According to a note out of Goldman Sachs, its analysts believe there is more pain ahead for lithium prices.
And while forecasting commodity prices is notoriously difficult, it is worth noting that Goldman has correctly predicted a sharp pullback in 2023. So, clearly, its analysts have a good idea of what is going on in respect to supply and demand.
Here is what Goldman is now forecasting for the average price for certain lithium types in the coming years compared to current spot prices:
- Lithium carbonate (per tonne)
- Spot: US$25,032
- 2023: US$38,794
- 2024: US$15,331
- 2025: US$11,000
- 2026: US$16,883
As a point of reference, the lithium carbonate spot price was fetching US$66,750 in the middle of January.
- Lithium hydroxide (per tonne)
- Spot: US$21,865
- 2023: US$40,951
- 2024: US$17,273
- 2025: US$12,500
- 2026: US$18,571
The lithium hydroxide spot price was trading at US$76,650 in January.
- Lithium spodumene 6% (per tonne)
- Spot: US$3,010
- 2023: US$4,341
- 2024: US$1,763
- 2025: US$800
- 2026: US$1,126
As a comparison, lithium spodumene 6% was fetching US$5,990 a tonne in the middle of January.
Time will tell if these forecasts prove accurate, but I wouldn't bet against Goldman on this one based on its previous calls.