Lithium prices (may) have hit rock bottom – next, the upswing

1st November 2019
Resources Rising Stars

The evidence is mounting. For lithium prices — and accompanying sentiment — an upswing is on the horizon (reports Stockhead).

This is especially welcome news for beleaguered ASX-listed producers, like Pilbara Minerals (ASX:PLS), Altura Mining (ASX:AJM), Galaxy Resources (ASX:GXY), and Orocobre (ASX:ORE) which have been shedding market cap at a rapid rate.

Its even better news for investors in bankrupt Alita Resources (ASX:A40) (if/when administers can find a way to get that rattletrap firing again).

Last Tuesday, a Goldman Sachs note said that to ensure capacity comes online to meet projected demand growth “we believe the long-term lithium price needs to incorporate an incentive component above the marginal cost”.

“As industry specialist Benchmark Mineral Intelligence has noted: ‘while a downturn in prices has reflected a necessary correction towards near-term market fundamentals, it fails to represent the increasing possibility of another major deficit in the market by the early 2020s’.”

They aren’t the only ones who believe lithium’s bad days are numbered.

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