Lithium markets at a ‘turning point’: Morgan Stanley – by Alex Gluyas (Australian Financial Review – May 8, 2023)

Morgan Stanley believes lithium markets have hit a turning point following a brutal sell-off in the battery metal, as sentiment improves due to falling inventories and softer-than-expected supply growth. While lithium spot prices in China have plunged 70 per cent over the past five months, the broker noted that prices have rebounded.

Carbonate spot prices have bounced 30 per cent from their lows and hydroxide has recovered by 20 per cent. While lithium chemicals are gaining, the spodumene concentrate price has continued its downward trajectory, and now sits at $US4050 a tonne.

Lithium stocks were among the strongest performers on the Australian sharemarket on Monday following the rebound in prices of the battery material. Core Lithium climbed 6.7 per cent to $1.03, Pilbara Minerals rose 4.6 per cent to $4.60 and Lake Resources added 4 per cent to 52¢.

“The turning point in lithium markets? Yes, it looks like that for now at least,” said Marius van Straaten, commodities strategist at Morgan Stanley.

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