Global investment bank Goldman Sachs has warned about the further decline in battery metal prices. Battery mineral mining companies have begun to regulate production, but the downward trend continues.
On the 5th, Goldman Sachs stated in an investment note, “Although the prices of nickel, lithium, and cobalt have fallen by 60%, 80%, and 65% respectively from their cyclical highs, it is still too early to end their bear markets definitively.”
Goldman Sachs predicts that nickel, lithium, and cobalt prices will fall by 15%, 25%, and 12% respectively over the next 12 months. In this case, the price of nickel is expected to drop to $15,000 per ton, lithium to $10,000 per ton, and cobalt to $26,000 per ton.
The price of lithium carbonate in China was traded at $15,000 per ton on the day. This is a 70% drop compared to the same period last year. The London Metal Exchange (LME) recorded nickel prices at $17,945 per ton and cobalt prices at $28,550 per ton.
The prices of key mineral resources, including nickel, have been steadily rising due to the growth of the electric vehicle market. The price rally has continued with the increase in mineral demand and supply instability due to the COVID-19 pandemic.
However, as the global electric vehicle market stagnated in the second half of last year, the prices of key mineral resources also began to decline. Significantly, the prices of lithium and nickel reversed to a downturn as the demand in China, the world’s largest electric vehicle manufacturing market, decreased significantly.
According to China’s National Bureau of Statistics, China’s production of new energy vehicles, including electric cars, increased by about 30% compared to the previous year. Compared to the 2.5 times and 2 times increase compared to the last year in 2021 and 2022, respectively, the increase has significantly decreased.
In response, mineral mining companies are also adjusting their production. Australian mining company BHP announced that it would temporarily shut down some of its nickel concentrators, and another Australian mining company, Core Lithium, also halted the operation of one of its lithium projects.
Tim Bush, an electric vehicle battery research analyst at UBS, said, “Especially in the case of lithium and nickel, the balance of supply is prolonged, making the outlook quite gloomy.” Still, he also diagnosed, “However, it is not necessarily a bad thing as it helps alleviate the pain that some American and European car manufacturers are experiencing due to lower battery prices.”
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