Citigroup has cut its lithium price forecasts by up to 40%, citing slower battery demand, rising trade uncertainty and broader economic headwinds. It now sees lithium carbonate and hydroxide at $12,000 a tonne over the next three months.
At a glance
- Citi cut its spodumene forecast to $1,200 a tonne from $2,000.
- Lithium carbonate futures in Guangzhou have fallen more than 40% since the end of August.
- CATL's Jianxiawo mine, shut since August last year, received an environmental approval on Friday.
Background
Lithium carbonate and lithium hydroxide are the chemicals used to make battery cathodes, and spodumene is the lithium-rich mineral they are refined from. Lithium prices depend heavily on demand for electric vehicle and grid-storage batteries, much of it in China.
What happened
Citi cut its three-month price targets for lithium carbonate and lithium hydroxide to $12,000 a tonne, from $20,000 and $17,000, Bloomberg reported. It lowered its spodumene forecast to $1,200 a tonne from $2,000, and cut its estimates for all three through the end of 2028.
With supply expected to improve in 2027 and demand uncertain, buyers are likely to delay purchases and keep inventories lean, the bank said in a note released on Friday. "Sentiment and positioning are likely to remain the dominant drivers in the near term, keeping risks skewed to the downside," it said.
Why the bank turned cautious
Citi described the shift as a "lithium reset" driven by fears of weaker demand next year. A plan to limit Chinese hybrid-vehicle exports to the European Union and Beijing's phase-out of some tax benefits have added to worries about demand for batteries.
Supply could also rise. CATL's Jianxiawo mine in China's Jiangxi province, shut since August last year, received environmental approval from the local government on Friday, potentially clearing the way to restart.
What it means
The most-active lithium carbonate contract on the Guangzhou Futures Exchange rose 1.2% to 91,160 yuan ($13,710) a tonne on Monday, but it has fallen more than 40% since the end of August. Goldman Sachs expects the market to move from deficit to near balance this quarter and into surplus over the next two years.
New supply is still arriving, including Rio Tinto's two new lithium operations in Argentina, MINING.COM noted.
Our read
Outlook: bearish. A major bank's forecast cut, weaker battery demand and possible new supply all point to lower lithium prices in the near term.
What to watch
- Whether CATL restarts the Jianxiawo mine.
- Chinese battery and electric vehicle demand into 2027.
- Lithium carbonate futures in Guangzhou.
For information only, not investment advice.
Lithium price in India
metalscost.com India reference price as of 2026-11-05.
Detailed analysis
Timeline
- 2026-10-30: Citi releases its note cutting lithium price forecasts.
- 2026-10-30: CATL's Jianxiawo mine receives local environmental approval.
Demand Drivers
Slower battery demand and limits on Chinese hybrid-vehicle exports to the EU are weighing on lithium.
Supply Drivers
Supply is expected to improve in 2027, and CATL's Jianxiawo mine may restart after an approval.
What could lift prices
- Lithium futures rose 1.2% on Monday after a 40% slide, showing some buyers see value.
- Low prices could slow some new mine investment.
What could weigh on prices
- Citi expects buyers to defer purchases and keep inventories lean.
- Goldman Sachs sees the market moving into surplus over the next two years.
Country impact
| Country | Impact | Reason |
|---|---|---|
| China | High | Its battery demand and CATL's Jianxiawo mine drive lithium prices. |
| Australia | Medium | Spodumene miners face a lower price outlook. |
Industry impact
| Industry | Effect | Reason |
|---|---|---|
| Lithium Mining | Negative | Miners face lower forecast prices for spodumene and lithium chemicals. |
| Battery Manufacturing | Positive | Battery makers could pay less for lithium. |
Who gains, who loses
- Battery makers: Lower lithium prices would cut their material costs.
- Lithium miners: Citi cut its spodumene forecast by 40% to $1,200 a tonne.
Other ways this could play out
- If Jianxiawo restarts soon, lithium prices could fall further.
- If battery demand recovers in 2027, prices could rise above Citi's forecast.
Price risks
- Trade restrictions on Chinese vehicles could cut battery demand further.
- Supply cuts by high-cost miners could support prices.
Technical view
Price is trading below both its 20-period and 50-period moving averages, a bearish alignment.
Computed from metalscost.com's own stored price history.
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