Lithium’s confidence crisis: Is it justified?

Lithium's year has started poorly. Prices have fallen back to the cost curve from extravagant highs over the last 12 months, and the trend has continued into 2024. A material pull-back in EV markets during Q4 2023, combined with a persistent economic malaise has precipitated the latest correction that has been felt across all battery raw materials. Lithium’s strong growth pipeline has become a liability as demand falters and investors are anxious that things could get worse. So, is the lithium story over? Or is this just a detour on a much longer journey? What has changed to undermine the industries' confidence? In this report we look back at what has occurred, explore the reasons for the recent weakness, and describe how we think this downturn will play out. There is no doubt that some challenging times lie ahead, but we think there is still plenty to savour for lithium investors.