① Goldman Sachs analysts expect that on a 12-month basis, the prices of cobalt, nickel, and lithium carbonate will drop by 12%, 15%, and 25%, respectively; ② According to the research report, there are still “large” supply pipelines for metals, and along with the decline in demand for electric vehicles in Western countries, the excess amount of lithium and nickel “will still be quite large” in 2024.
Financial Services Association, March 5 (Editor: Zhao Hao) Goldman Sachs Group, the top international investment bank, believes that it is still too early to assert that “the sharp decline in the price of battery metal raw materials is over,” and warns that huge supply and headwinds in the Western electric vehicle industry will keep their prices low for a longer period of time.
Goldman Sachs analysts led by Nicholas Snowdon wrote in a research report released on Tuesday (March 5) that the outlook for nickel, lithium, and cobalt is still pessimistic.
“Although battery metal prices have declined significantly, with nickel, lithium, and cobalt falling 60%, 80%, and 65%, respectively, from the peak of the cycle, we believe it is still too early to judge that the bear market for these metals is over.”
According to the research report, profits from these metals have put some pressure on the supply side in the past quarter, leading to a reduction in the incremental supply of lithium and nickel, but there are still “large” supply pipelines. In addition, along with the decline in demand for electric vehicles in Western countries, Goldman Sachs expects the excess amount of lithium and nickel to “still be quite large” in 2024.
Goldman Sachs analysts expect the prices of cobalt, nickel, and lithium carbonate to drop by 12%, 15%, and 25%, respectively, on a 12-month basis.
This means that over the next 12 months, the bank expects the price of cobalt to fall to $26,000 per ton (previously estimated at $28,000); the price of nickel will drop to $15,000 per ton; lithium carbonate will fall to $10,000 per ton (previously estimated at $11,000).
By the close of China's domestic commodity futures trading on Tuesday, the price of lithium carbonate had fallen by more than 7% to 108,500 yuan (about $15,071), a cumulative drop of nearly 70% compared with the same period last year.
The latest price of nickel being traded on the London Metal Exchange (LME) was $17,945 per ton, and the price of cobalt was $28,550 per ton.
In addition to Goldman Sachs, analysts from many agencies have previously warned that the future of electric vehicle battery metals is still relatively sluggish. UBS analyst Tim Bush said at the beginning of the year, “The outlook is still quite bleak, especially lithium and nickel, which are still far from balanced supply.”
At the time, Bush added, “This isn't necessarily a bad thing either, because it means batteries will be cheaper for car manufacturers and help ease the pain experienced by some American and European car manufacturers.”