If you own ASX lithium shares, then you'll know just how important the price of the battery-making ingredient is to valuations.
Right now, with prices still at high levels (compared to historic levels), lithium miners such as Allkem Ltd (ASX: AKE) and Pilbara Minerals Ltd (ASX: PLS) are printing money. This is driving big profits and supporting premium valuations.
But how long will lithium prices remain at current levels? Let's take a look and see what analysts at Goldman Sachs are forecasting for the white metal.
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Lithium price forecast
According to its weekly note, the broker is now forecasting the following average prices for these lithium types in the coming years compared to current spot prices:
- Lithium carbonate (per tonne)
- Spot: US$32,345
- 2023: US$38,794
- 2024: US$15,331
- 2025: US$11,000
- 2026: US$16,883
- Lithium hydroxide (per tonne)
- Spot: US$29,881
- 2023: US$40,951
- 2024: US$17,273
- 2025: US$12,500
- 2026: US$18,571
- Lithium spodumene 6% (per tonne)
- Spot: US$3,710
- 2023: US$4,341
- 2024: US$1,763
- 2025: US$800
- 2026: US$1,126
As you can see above, the broker continues to believe that lithium prices will decline across the board over the coming years. However, it does now expect an uptick to occur in 2026, which is good news for ASX lithium shares.
Time will tell if Goldman makes the right call on the battery-making ingredient. But its prediction that lithium prices would fall heavily this year has so far been accurate, so don't be surprised if they follow the trajectory outlined above.
