Here's the latest lithium price forecast through to 2027

Supply is forecast to continue outstripping demand for some time to come.

| More on:
A lithium battery with blue power background, indicating positive share price movement for clean ASX lithium miners

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

Last week, Pilbara Minerals Ltd (ASX: PLS) released its quarterly update and reported yet another sharp decline in its average realised lithium price.

And while the company didn't provide any real financial information, it is safe to assume that its profits are continuing to be squeezed.

But will this continue to be the case or is there light at the end of the tunnel?

Let's take a look now and what Goldman Sachs is saying about lithium prices and where they could be heading from here.

Lithium price forecast

To begin with, here's how spot prices are looking this week compared to the average of last year:

  • Lithium carbonate – China: US$13,619 per tonne (2023 average: US$32,694)
  • Lithium hydroxide – China: US$9,597 per tonne (2023 average: US$32,452)
  • Spodumene 6% – US$1,240 per tonne (2023 average: US$3,712)

But where next for lithium prices from here? Let's see what Goldman is forecasting for lithium prices out as far as 2027.

Lithium carbonate – China:

  • 2024: US$11,106 per tonne
  • 2025: US$11,000 per tonne
  • 2026: US$13,323 per tonne
  • 2027: US$15,646 per tonne

Lithium hydroxide – China:

  • 2024: US$9,849 per tonne
  • 2025: US$12,500 per tonne
  • 2026: US$14,323 per tonne
  • 2027: US$16,146 per tonne

Spodumene 6%:

  • 2024: US$928 per tonne
  • 2025: US$800 per tonne
  • 2026: US$978 per tonne
  • 2027: US$1,155 per tonne

What is this based on?

Goldman has provided investors with its supply and demand model that it uses to justify its bleak forecasts.

The broker certainly agrees that demand for the battery material is increasing and will continue to increase.

It is forecasting global demand for lithium carbonate equivalent (LCE) to increase by the following:

  • 18% in 2024 to 1,169,000 tonnes
  • 28% in 2025 to 1,501,000 tonnes
  • 20% in 2026 to 1,796,000 tonnes
  • 14% in 2027 to 2,045,000 tonnes

However, while this appears to paint a very healthy picture for lithium miners like Core Lithium Ltd (ASX: CXO), the broker still believes that supply will continue to outstrip demand for the foreseeable future, weighing heavily on lithium prices.

For supply, the broker is forecasting the following increases (adjusted for disruption):

  • 31% in 2024 to 1,269,000 tonnes
  • 39% in 2025 to 1,764,000 tonnes
  • 19% in 2026 to 2,095,000 tonnes
  • 14% in 2027 to 2,389,000 tonnes

Surplus to continue

All in all, including battery scrap supply, the broker expects the following surpluses in the coming years:

  • 12% in 2024
  • 19% in 2025
  • 19% in 2026
  • 18% in 2027

In light of the above, unfortunately the tough times appear unlikely to be ending any time soon.

Motley Fool contributor James Mickleboro 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 Group. 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

Man with rocket wings which have flames coming out of them.
Materials Shares

Bell Potter says this speculative ASX stock could rise 200%+

This stock could more than triple in value according to the broker. But it is only suitable for high risk…

Read more »

Emotional euphoric young woman giving high five to male partner, celebrating family achievement, getting bank loan approval, or financial or investing success.
Share Gainers

Guess which ASX lithium share just leapt 13% on major financing news!

Investors are bidding up the ASX lithium share on the back of major financing news.

Read more »

A young male ASX investor raises his clenched fists in excitement because of rising ASX share prices today
Materials Shares

'Tip of the iceberg': Why this ASX lithium stock has exploded 200% in a week

What is getting investors excited this week? Let's find out.

Read more »

A young woman holding her phone smiles broadly and looks excited, after receiving good news.
Share Market News

Patriot Battery Metals share price rockets 11% on new lithium drilling results

The ASX lithium stock has more than recovered its share price losses from yesterday.

Read more »

A female miner wearing a high vis vest and hard hard smiles and holds a clipboard while inspecting a mine site with a colleague.
Materials Shares

How much passive income would I make from 300 BHP shares?

Is this mining giant a good source of income? Let's see what analysts are predicting.

Read more »

Lion holding and screaming into a yellow loudspeaker on a blue background, symbolising an announcement from Liontown.
Materials Shares

Could Liontown shares roar 30%+ higher?

Is this beaten-down lithium developer about to roar higher? Let's see what Bell Potter is saying.

Read more »

A man holds his head in his hands, despairing at the bad result he's reading on his computer.
Materials Shares

Guess which ASX lithium stock dived 9% after parting ways with Albemarle

A promising agreement has been terminated but management remains confident.

Read more »

Man smiling at a laptop because of a rising share price.
Materials Shares

Novonix share price rockets on new Volkswagen deal

There's some big ASX news out of Novonix today.

Read more »