Exploring ASX 200 Lithium Shares? Goldman Sachs' 2024 Lithium Price Forecast Inside - Kalkine Media

December 04, 2023 04:09 PM AEDT | By Team Kalkine Media
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The trajectory of ASX 200 lithium shares, once soaring in 2022, has taken a downturn in 2023. The shift in fortunes reflects a complex interplay of factors impacting the lithium market, a crucial component in the production of batteries. Here's a closer look at the current state of ASX lithium stocks and what investors can potentially expect in 2024. 

The Rise and Fall of ASX Lithium Shares 

In 2022, lithium shares on the S&P/ASX 200 Index, such as Pilbara Minerals Ltd (ASX: PLS), Core Lithium Ltd (ASX: CXO), Allkem Ltd (ASX: AKE), IGO Ltd (ASX: IGO), and Liontown Resources Ltd (ASX: LTR), stood out as top performers. The surge was fueled by the soaring demand for lithium, driven by the electric vehicle (EV) revolution. 

However, 2023 brought a stark contrast. China, a significant consumer of lithium and the world's largest, made impactful policy changes by ending EV subsidies and incentives. This move, coupled with an influx of global lithium supplies, led to a decline in demand and a surplus in the lithium market. 

Impact on ASX 200 Lithium Shares 

The repercussions were swift, with the price of lithium carbonate plummeting more than 75% throughout the year. Unsurprisingly, this downturn put pressure on ASX 200 lithium shares, affecting their performance over the past 12 months: 

  • Pilbara Minerals Ltd (ASX: PLS): Down 13% 
  • Core Lithium Ltd (ASX: CXO): Down 20% 
  • Allkem Ltd (ASX: AKE): Down 11% 
  • IGO Ltd (ASX: IGO): Down 8% 
  • Liontown Resources Ltd (ASX: LTR): Down 26% 

While these stocks remain in positive territory over the longer term, the challenges of the past year are evident. 

Outlook for 2024 

Looking ahead to 2024, ASX 200 lithium shares may face continued challenges. Goldman Sachs analysts predict a substantial surplus in the global lithium market, estimated at 202,000 tonnes, representing 17% of global demand. This surplus is expected to drive prices down. 

Goldman Sachs maintains a bearish view on the lithium market, anticipating prices to trade deeply into the cost curve to balance the market. The latest analysis suggests a lowered 12-month target for China Lithium Carbonate and CME Asia CIF Lithium Hydroxide. 

Headwinds include a decline in Chinese lithium battery demand volume growth and an increase in chemical output surpassing growth in China's battery output. The import of spodumene concentrate, particularly from Australia and Zimbabwe, has continued to rise sharply. 

Potential Strategies for ASX 200 Lithium Shares 

With the outlook pointing towards a surplus and declining prices in 2024, ASX 200 lithium shares may need to consider cost-cutting measures to navigate the challenging market conditions. Investors will likely watch closely for how these companies respond to the evolving dynamics of the lithium market. 

In conclusion, the once-promising landscape for ASX 200 lithium shares has faced a significant shift. As the industry grapples with an oversupply and weakened demand, the path ahead for these shares will depend on strategic decisions, market dynamics, and the ability to adapt to the evolving lithium landscape in 2024 


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