Goldman Sachs: The Battery Metal Bull Market Has Come to An End, and Lithium Prices Are Expected to Fall to Over $16,000/mt Next Year

SHANGHAI, May 30 (SMM) - Goldman Sachs Group said that the prices of the three main battery metals cobalt, lithium and nickel are expected to fall in the next two years, and investors who want to hold exposure related to the green energy transition may have increased their holdings too quickly. "Investors are fully aware that battery metals will important role in the post-2000 global economy," Goldman Sachs analysts Nicholas Snowdon and Aditi Rai, among others, said in a Sunday report. "Despite the exponential growth in demand, we believe the current bull market in battery metals is over. Goldman Sachs said the long-term prospects for these battery metals remain strong, not because of the rapid adoption of electric vehicles. But investor enthusiasm has led to a supply glut. "Investor money has poured into supply investments related to the long-term demand for electric vehicles, essentially treating the spot-driven commodity as a longer-term equity trade," the analysts said. This fundamental mispricing, in turn, has led to oversupply, far exceeding demand trends. " Goldman Sachs said lithium prices are expected to see a "significant correction", with prices expected to average below $54,000/mt this year before falling further to just over $16,000/mt by 2023. Cobalt prices could fall to $59,500/mt next year from an average of about $80,000/mt currently. Analysts predict nickel prices could rise nearly 20% this year to $36,500/mt before falling again under "fundamental pressure."