Citi Sharply Cuts Lithium Price Forecasts, Slashing March Target to $12,000/Ton
nashnova research
Citi cut its three-month lithium carbonate target from $20,000 to $12,000 per tonne — a 40% reduction — calling the downturn a "lithium price reset," not a temporary dip but a full reassessment of supply and demand through 2028.
How deep are the cuts?
Lithium carbonate: three-month target slashed from $20,000 to $12,000/t. Lithium hydroxide: from $17,000 to $12,000/t. Spodumene: from $2,000 to $1,200/t.
All three core battery materials were downgraded — and the revised forecasts extend through the end of 2028.
This means → Citi sees no quick rebound; low prices will persist for at least two years.
Why is Citi so bearish?
Citi's analysts cite a triple headwind: slowing battery demand growth, rising trade uncertainty, and intensifying macro drag.
The EU is moving to restrict Chinese hybrid-vehicle exports, while Beijing is phasing out some EV tax incentives — both policies squeeze demand for vehicle batteries and grid-scale storage simultaneously.
In plain terms = fewer buyers, fading subsidies, and producers still ramping up — the ingredients for a structural oversupply.
What does the market look like right now?
The Guangzhou Futures Exchange lithium carbonate front-month contract traded at 91,160 yuan/t (~$13,710), up 1.2% on the day but down more than 40% since late August.
Goldman Sachs forecast last month that the lithium market would shift from shortage to near-balance this quarter, then stay in surplus for the next two years.
This means → two major banks agree: the shortage era is over; the surplus cycle has begun.
Can CATL's mine approval turn the tide?
CATL's Jianxiawo lithium mine in Jiangxi — shut since last August — received local environmental approval on Friday. CATL shares rose as much as 4.2% intraday in Shenzhen.
Citi, however, argues the broader supply-improvement trend will accelerate in 2027; whether demand can absorb that supply is the real test.
In plain terms = one mine restarting is good news for CATL, but when the entire industry is expanding output and buyers are sitting on the sidelines, an extra mine adds to the glut rather than relieving it.
What drives lithium prices in the near term?
Citi's analysts stated plainly: "Sentiment and positioning will be the dominant drivers near-term, with risks skewed to the downside."
Consumers may delay purchases and keep inventories lean, putting further pressure on spot prices.
This reflects a deeper signal: in an oversupplied market, buyers hold pricing power — sellers can cut prices and still fail to win orders.
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