As things stand, the Lake Resources N.L. (ASX: LKE) share price is on course to record a significant decline for the current financial year.
As you can see on the chart below, since this time last year, the lithium developer's shares have lost approximately two-thirds of their value.
This has been driven by a number of factors. This includes falling lithium prices, short selling, and, most recently, the release of a bitterly disappointing update.
Will FY 2024 be better for the Lake Resources share price?
There are arguably two things that will have the biggest say on where the Lake Resources share price goes in FY 2024.
The first is the price of lithium. Some analysts, such as Goldman Sachs, believe that lithium prices are going to fall heavily over the next 12 months as supply increases quicker than demand.
For example, this weekend, the broker released its weekly lithium update and reiterated its belief that the lithium carbonate price will fall from the current spot price of US$52,750 a tonne to an average of just US$15,331 a tonne in 2024.
That is an almighty drop and would have significant implications for Lake Resources. Its recent update was based on the assumption that the lithium carbonate price would be US$23,740 per tonne. A price 35% lower than assumptions could hit its potential earnings hard.
Another item that could have a big impact on the Lake Resources share price in FY 2024 is the all-important definitive feasibility study (DFS) for the Kachi project.
Management is targeting completion of the DFS by December 2023. This means that later this year we should have all the finer details about the project. If they are better or worse than current assumptions, expect some movement from its shares.
Overall, it looks likely to be another wild ride for shareholders that are sticking with the struggling company.
