The last 12 months have been very difficult for ASX lithium stocks.
During this time, the likes of Arcadium Lithium (ASX: LTM), Core Lithium Ltd (ASX: CXO), IGO Ltd (ASX: IGO), Liontown Resources Ltd (ASX: LTR), and Pilbara Minerals Ltd (ASX: PLS) have crashed deep into the red.
In fact, these stocks have lost in the range of 40% to 80% of their value during the period.
The catalyst for this has been falling lithium prices due to a combination of factors. This includes the oversupply of the white metal, softer than expected demand, and the emergence of low cost lepidolite in China.
Will lithium prices rebound soon? Let's take a look at what analysts at Goldman Sachs are forecasting for three widely used lithium types (lithium carbonate, lithium spodumene, and lithium hydroxide) through to 2027.
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2023 lithium prices
In order to give you an understanding of how far lithium prices have fallen, let's start by looking at what lithium prices averaged during 2023:
They were as follows:
- Lithium carbonate – China: US$32,694 per tonne
- Lithium hydroxide – China: US$32,452 per tonne
- Spodumene 6%: US$3,712 per tonne
Current spot prices
Now let's have a quick look at the current spot prices of these metals. They are as follows:
- Lithium carbonate – China: US$9,896 per tonne
- Lithium hydroxide – China: US$9,680 per tonne
- Spodumene 6%: US$920 per tonne
This represents declines of 70%, 70%, and 75%, respectively, from 2023 averages.
Lithium forecasts through to 2027
According to Goldman Sachs' forecasts, it doesn't look like lithium prices will be rebounding to 2023 levels any time soon, if at all.
It suspects that prices will remain under pressure for the next couple of years before starting to rise towards long term estimates. However, these long term price estimates are approximately half of what the metals were commanding in 2023.
Lithium carbonate – China:
For lithium carbonate, the broker continues to forecast the following average prices through to 2027 and then for the long term:
- 2024: US$11,683 per tonne
- 2025: US$11,000 per tonne
- 2026: US$13,323 per tonne
- 2027: US$15,646 per tonne
- Long-term: US$15,500 per tonne
Lithium hydroxide – China:
For lithium hydroxide, the broker is continues to forecast the following:
- 2024: US$11,463 per tonne
- 2025: US$12,500 per tonne
- 2026: US$14,323 per tonne
- 2027: US$16,146 per tonne
- Long-term: US$15,500 per tonne
Spodumene 6%:
Finally, the broker also continues to expect spodumene prices to remain notably lower than 2023 averages for the foreseeable future. It is forecasting the following for the coming years and long term:
- 2024: US$995 per tonne
- 2025: US$800 per tonne
- 2026: US$978 per tonne
- 2027: US$1,155 per tonne
- Long-term: US$1,150 per tonne
