Goldman Sachs Predicts the Price of Key Battery Materials Will Fall in the Next Two Years

Goldman Sachs predicts the price of key battery materials will fall 6 photos
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With the price of raw materials at sky-high levels in the past two years, the dream of truly affordable Li-Ion batteries has waned. According to Goldman Sachs analysts, the situation is terrible, but it will improve.
Goldman Sachs analysts Nicholas Snowdon and Aditi Rai believe a significant price correction is imminent for the battery metals like cobalt, nickel, and lithium. Although long-term predictions show the demand for these metals will only increase due to the growing EV sector, we should expect a price drop in the next two years. That’s because the investor exuberance has led to an oversupply, well ahead of the actual demand.

Investors are fully aware that battery metals will play a crucial role in the 21st-century global economy,” Goldman analysts said in a note on Sunday, as reported by Bloomberg. “Yet despite this exponential demand profile, we see the battery metals bull market as over for now.”

The analysts expect a “sharp correction” in lithium prices, with the metal averaging under $54,000 a ton this year, down from a spot price of over $60,000. But it could get as low as $16,000 next year, as oversupply will quench the demand. Cobalt is expected to drop to an average of $59,500 a ton next year from roughly $80,000 now. The nickel is a different story, as it is expected to become 20% more expensive this year, at $36,500. But “fundamental pressures” will drive the price down again starting next year.

The prices are still projected to rise starting from 2024, as the auto industry will need to build more batteries. The recycling industry would have caught up steam by then, though, and “the demand surge will more sustainably overcome the current supply growth.” This is because the critical materials in Li-Ion batteries can be efficiently recycled. The result is an even purer form than the original materials.
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About the author: Cristian Agatie
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After his childhood dream of becoming a "tractor operator" didn't pan out, Cristian turned to journalism, first in print and later moving to online media. His top interests are electric vehicles and new energy solutions.
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