Lithium prices may pull back in the near term but will regain strength by 2024, one global analyst predicts.
Some of the ASX lithium shares we’re talking about here include Pilbara Minerals Ltd (ASX: PLS), Core Lithium Ltd (ASX: CXO), Mineral Resources Limited (ASX: MIN) and Sayona Mining Ltd (ASX: SYA).
Let’s look at the outlook for lithium prices in more detail.
‘Increasing’ lithium deficits
A global analyst is predicting lithium supply will exceed demand in the near term before returning to increasing deficits. Lithium is a crucial element in electric vehicle (EV) batteries.
S&P Global Commodity Insights principal research analyst Kevin Murphy said:
Over the near-term, supply-side growth will exceed demand for lithium. This will lead to a pullback in lithium carbonate spot prices during 2022 and into 2023 although prices will remain well above the lows hit in 2020.
By 2024 the lithium market is expected to return to increasing deficits which will provide buoyancy to prices.
Murphy added that lithium carbonate equivalent (LCE) supply is forecast to jump to 1.2 million tonnes by 2026. However, he noted demand could be higher, at 1.25 million tonnes.
ASX lithium shares had a stellar start to the week amid a positive outlook from analysts at Macquarie.
The Pilbara Minerals share price soared 5.2% today. Meanwhile, Core Lithium jumped 3.5% and Sayona Mining leapt 6.25%.
Share price snapshot for ASX lithium shares
The Sayona Mining share price has exploded 698% in a year, while Core Lithium has rocketed 415%. Meanwhile, the Pilbara Minerals share price has soared 137% in the last 52 weeks.
In contrast, the S&P/ASX 200 Index (ASX: XJO) has climbed 1.12% in a year.
The post Own ASX lithium shares? Here’s a global expert’s outlook on lithium demand (and supply) appeared first on The Motley Fool Australia.
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The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. 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.
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