The Lake Resources NL (ASX: LKE) share price has endured a tough year, falling 69% into the red since January.
Zooming out wider still, Lake Resources is down from $2.31 in April of 2021, tying in closely to the price of lithium.
Shares in the lithium player are priced at 4.1 cents per share before the open on Monday, having spiked more than 9% in the past month.
With global lithium prices currently in a slump, does the Lake Resources share price have more pain to come? Let's see what the experts think.
Kachi Project: The crown jewel
The Kachi project, located in Argentina is Lake Resources' flagship asset. Along with lithium prices, the Lake Resources share price is sensitive to updates at Kachi.
The company's 2024 annual report, posted in September, noted several recent developments at the site.
It has completed a definitive feasibility study (DFS) for the first project's first phase.
Findings from the DFS estimate a net present value (NPV) of US$2.3 billion for Kachi, translating to a more than 20% rate of return for the miner.
Lake has a market value of approximately $65 million at the time of writing, making the DFS findings significant in terms of size.
The Kachi project is also expected to generate US$21 billion in revenue and US$16 billion in pre-tax earnings over its first phase.
In its annual report, CEO David Dickson said the findings support the company's "credible and de-risked execution plan to support delivery of the project".
Lake also raised $2.5 million earlier this year through an at-the-market subscription agreement with Acuity Capital.
The funds will be rolled into further developments at the Kachi project, adding a fresh capital injection to advance operations.
Lithium market woes hit Lake Resources' share price
The global lithium market has faced significant pressure in 2024, with prices falling in continuation of a downtrend in situ since late 2022. This has impacted the Lake Resources share price.
Lithium carbonate prices hit a three-year low of CNY 71,500 per tonne in September.
This comes after the battery metal was trading at CNY 174,500 per tonne in October last year, illustrating the sharp declines.
They have since recovered slightly to CNY 75,500 per tonne at the time of writing.
According to Trading Economics, this was driven by oversupply and dwindling demand for electric vehicles (EVs).
The flood of new supply relative to dwindling demand for new electric vehicles, the main use for lithium, drove carbonate prices to fall 21% this year after an 80% plunge in 2023.
Meanwhile, Lake Resources non-executive chair Stuart Crow said lithium was in a bull market in "the short term" during the annual report.
In the short term, lithium is in a bear market, with prices having fallen significantly and new projects and investments being curtailed as a result. Ultimately though, we believe that the market will rebalance, with the long-term structural thematic underpinning lithium demand remaining intact.
Lake Resources share price at a turning point?
Despite these struggles, some analysts believe that the market may be close to a turning point.
Citi, for instance, forecasts a rise in lithium prices over the next two to three months to potentially nudge US$14,000 per tonne after Chinese producer CATL suspended its operations in September.
At the current exchange rate, this equals CNY 98,258 per tonne.
Meanwhile, Trading Economics also notes experts project a potential 50% rise in the lithium price. The view is that Chile – a major lithium producer – aims to double its output over the coming decade.
As "the race to secure battery metals" stretches higher, this could strengthen the market.
Crow echoes the sentiment on the demand side:
Lithium demand is expected to double by 2026 and triple by 2030 from 2023 levels, presenting a compelling case for investment.
Importantly, the lengthy lead times in developing new projects and recent curtailments could lead to lithium raw material deficits emerging from 2028 and extending to around 1.8 million tonnes LCE by 2040.
In short, the world needs 100 Kachi Phase One projects to balance the market by 2030.
On the broker side, the Lake Resources share price is rated a strong buy from consensus, according to CommSec.
Foolish takeaway
So, has the Lake Resources share price hit a bottom? It's difficult to say. The company's fundamentals, particularly the Kachi project, are in reasonable shape.
However, the broader lithium market continues to face unsettled headwinds.
Despite this, brokers are bullish, with a consensus buy rating on the stock. And for the company, it all depends on what lithium prices do from here.
The view from many experts on the price of lithium moving forward is also a positive one – many believe the battery metal can carry higher prices again. Time will tell.
In the last 12 months, Lake Resources is down more than 76%.
