Citi believes the recent weakness in lithium prices has been driven by a combination of rising inventories on the GFEX exchange, a more responsive supply environment and ongoing concerns about short-term demand from end markets.
According to the bank, most of the downward pressure appears to have already played out, suggesting the market may be approaching a period of stabilization. Citi expects lithium prices to remain range-bound in the near term before conditions become more supportive.
The bank highlighted the potential for a seasonal restocking cycle ahead of the traditional peak demand period in August and September, which could provide a catalyst for stronger pricing.
In addition, Citi pointed to another wave of export front-loading as a factor that may help underpin demand and contribute to a recovery in lithium prices.
The firm did not indicate when the expected consolidation phase might conclude or provide a specific timeframe for the anticipated rebound.Get commodities prices from InvestorsHub