It's fair to say that 2023 has not been kind to Core Lithium Ltd (ASX: CXO) shares.
Despite graduating from being a lithium developer to a lithium miner and reporting a maiden profit, its shares have been among the worst performers on the market.
As things stand, Core Lithium shares are on course to record a yearly decline of 75%.
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What's the outlook for Core Lithium shares in 2024?
Clearly, after such a horror 12 months, it wouldn't be hard for an improved performance in 2024. But is that likely?
Well, there are a number of factors that could have a major say in how Core Lithium shares perform next year.
Firstly, the company's fall from grace this year means it is quite likely to be kicked out of the ASX 200 index at a future rebalance. This could put additional pressure on its shares because index funds and fund managers with strict investment mandates would likely be forced to hit the sell button.
On the plus side, it would be harder for short sellers to target the company if it fell out of the benchmark index.
Secondly, and arguably most important, are lithium prices. They have fallen heavily this year amid weak demand. But with analysts predicting a lithium surplus for the next 2-3 years, prices could remain at low levels for longer.
This would be bad news for Core Lithium, which is struggling with current prices. So much so, it has suspended the BP33 underground development and warned that it could curtail production to conserve cash.
This isn't going to do its balance sheet any good and could mean it needs to raise additional funds. In addition, there are concerns that the suspension of the underground development could lead to a production gap further down the line.
Though, conversely, with so much bad news being priced in, if lithium prices do rebound next year, Core Lithium shares certainly could take off.
Hopefully, for shareholders, the latter is what happens. But only time will tell.
