Lithium prices should start to rebound this year after a dramatic 12 months, according to Global Lithium’s Joe Lowry.
Lowry, known as ‘Mr Lithium’, told the Tribeca Future Facing Commodities Conference in Singapore that any market that was expected to grow tenfold over 10 years would experience growing pains and volatility.
“I still believe it is the lithium decade – I absolutely believe that,” he said.
Lithium prices dropped by more than 80% last year and have continued to fall in 2024 – though there has recently been signs of stability.
Both Canaccord Genuity and UBS have called the bottom for prices in recent weeks.
“I’m not going to say it has [bottomed] for sure but I think it's going to happen this year, if it hasn't already happened,” Lowry said.
Lowry said the lithium narrative was extremely negative.
“I've been in business for 34 years and I've never seen sentiment this negative,” he said.
“And it doesn't make sense because even at US$15,000 a tonne, historically, that's a pretty high lithium price.”
Lowry admitted that he never expected lithium carbonate equivalent prices to reach US$40,000/t, let alone US$80,000/t.
But he pointed out that there wasn’t one single lithium price.
“The China spot price is not the lithium price. There are a range of lithium prices,” Lowry said.
“So when you talk about lithium price bottoming, there's going to be multiple bottoms because there's multiple prices.”
Lowry said there was a misconception that he was a “wild lithium bull”.
“I think it's pretty much a balanced market until the end of the decade where I think it's going to be hard to get to 3 million tonnes of supply,” he said.
He noted that lithium projects were always late and the current fall in prices had disincentivised new production.
Even the biggest lithium bears at Goldman Sachs had forecast a deficit in 2030.
“I think there's going to be market tightness and that's going to put prices back up,” Lowry said.
“The real question is how high will price go? And I believe what the last cycle over the last 18 months has showed us is that there is swing supply, the lepidolite and the grinding up ceramic material and bringing in DSO from Africa.
“If you get if you haven't another run up above US$40,000, all of that's going to come back into the market and it's going to come back in quickly.
“So, I think we have found that there's a natural cap on a price run. I'm not saying prices will never go to US$80,000 again, but if it goes there it's not going to be there for very long.”
Lowry said the most transparent reporter of lithium prices was Chilean producer SQM in its quarterly reports.
SQM reported a realised price of US$16 per kilogram of LCE in the December 2023 quarter and Lowry believes for the March quarter, it will be “at least US$16/kg”.
“My point is, if this is the low, it’s three times higher than the last low,” he said.
Canaccord forecasts LCE to average US$16/kg this year, while UBS is at US$15/kg and Macquarie is at US$20/kg.
“All things kind of lead to higher lithium prices – how high they go, I don’t know,” Lowry said.
“My thought is this year the price gets into the low US$20s, probably in Q4.”
Goldman is once again bearish at just US$11/kg.
“I don't think it's possible for them to be right,” Lowry said.
Lowry said there was a chance LCE could jump back to US$40,000-50,000/t but he hoped that didn’t happen.
“I'd rather see a stable environment.”
About us:
The Tribeca Future Facing Metals is currently underway in Singapore, and has brought together world leaders of the EV and critical minerals industry, along with resources companies and global investors.
More information about the conference can be found here: https://www.futurefacingcommodities.com/
Contact details:
David Tasker
Chapter One Advisors
T: +61 433 112 936
E: dtasker@chapteroneadvisors.com.au
