Morningstar crowns world’s top lithium stock plays – by Tom Richardson (Australian Financail Review – February 23, 2023)

https://www.afr.com/

Lithium investors are hoping a retreat in lithium carbonate prices in China has passed after a torrid February for the ASX’s green energy darlings. The sector leaders, including Pilbara Minerals, Mineral Resources, Allkem and IGO Ltd, all firmed on Thursday as investors monitor the collateral damage to lithium demand from China’s decision to end electric vehicle subsidies for consumers from the start of this year.

Lithium carbonate prices in China fell 7500 yuan ($1595) to a one-year low of 410,000 yuan a tonne on Wednesday and have shed around 30 per cent from highs in November 2021.

Seth Goldstein, a US Morningstar analyst, said calls for lithium prices to tumble over the next few years were too pessimistic, and that prices would not revert to the marginal cost of production, estimated at $US12,000 a tonne, until 2030.

“We’re forecasting $US70,000 a tonne in 2023 for carbonate spot prices. I know prices are below that now, but what we’re seeing is battery producers carrying less inventory, especially in China, in the hope more supply comes online,” Mr Goldstein said on Thursday.

For the rest of this article: https://www.afr.com/markets/equity-markets/morningstar-crowns-world-s-top-lithium-stock-plays-20230223-p5cmy0