Energy Wall Street giant bank predicts gloomy outlook for battery metals – lithium price to fall 70 percent soon, bank says

Wall Street giant bank Goldman Sachs anticipates gloomy prospects for key battery metals. Bank says cobalt, lithium and nickel prices will fall over the next two years, news agency Bloomberg reported.

“Investors know that battery metals play a key role in the global economy of the 21st century,” analysts at Goldman Sachs wrote in a paper released on Sunday.

“Despite growing demand, we expect the fast-growing growth market for battery metals to be over for the time being.”

For example the bank expects a sharp correction in the price of lithium, which is important for electric car batteries. Lithium has paid an average of less than $ 54,000 a tonne this year. Goldman estimates that lithium will cost just over $ 16,000 a tonne on average next year.

The price is therefore expected to fall by more than 70%.

Goldman Sachs of Cobalt expects to fall next year from the current price of about $ 80,000 a tonne to about $ 59,500. The drop would then be about 26.5 percent. For nickel prices, Goldman analysts first expect a rise of nearly 20 percent this year before “fundamental pressures” drop its price again.

According to Goldman, the long-term outlook for lithium and other battery metals is strong due to the rapid electrification of the car fleet, for example. In the short term, however, metals will suffer from overproduction.

According to the bank’s analysts, it is largely a matter of investors investing in battery metals in the same way as, for example, forward-looking stocks. The spot price of battery metals is very volatile, meaning it is sensitive to fluctuating in one and the other.

“This fundamental mispricing, in turn, has caused an oversupply reaction to demand,” Goldman analysts write.

Goldman however, it is possible that battery metal prices will rise again after 2024.

According to bank analysts, demand for battery metals will sustainably exceed current supply growth towards the end of this decade.