Lithium Boom Officially Over?

After experiencing one of the biggest bull runs in history, one of the world’s top brokers have made a strong prediction on this precious commodity.

Goldman Sachs have taken a bearish stance on the silvery-white metal and due to this essentially all the primary lithium companies on the ASX market have dropped quite significantly. Australia’s biggest lithium producer Pilbara Minerals fell over 22% to $2.30 along with other well-known names. Core Lithium Ltd also fell over 20%, Allkem Ltd fell over 15% and Liontown Resources also down almost 20%.

Goldman Sachs analysts Nicholas Snowdon and Aditi Rai predicted the “battery metals bull market” is over “. The analysts said:

“Investors are fully aware that battery metals will play a crucial role in the 21st century global economy.

Yet despite this exponential demand profile, we see the battery metals bull market as over for now.”

Goldman is also predicting the price of nickel and cobalt to fall in 2022 and 2023.

Meanwhile, following the Goldman report, Credit Suisse has downgraded Pilbara Minerals from outperform to a seemingly negative neutral rating. The broker has placed a price target of $3 on the company.

Despite today’s bearish outlook, however, long-term investors are still positive on the overall lithium outlook. Using a couple of examples, in the last year, the IGO share price is up 46%; the Allkem share price is up 85%; and the Pilbara share price is up 100%.

And investors with long term horizons may wish to look ahead to 2030.

According to Barrenjoey, “Electric Vehicles are set to transform the lithium and nickel commodity markets. We forecast global EV sales growing to 30 million in 2030 or around 30 per cent of new car sales.”