Citigroup has cut its lithium price forecasts for the next two years, reducing its three month lithium carbonate target by 40 percent to 12,000 dollars a tonne from 20,000 dollars. The bank’s analysts, including Shreyas Madabushi, called the shift a lithium reset, blaming slowing growth in battery consumption, rising trade uncertainty and a heavier macroeconomic backdrop, and they expect buyers to hold off on purchases while supply chain destocking runs its course.
The cuts run across the chain. On the detail reported from the note, the three month hydroxide target falls to 12,000 dollars a tonne from 17,000 dollars and the spodumene target to 1,200 dollars from 2,000 dollars, with estimates lowered through the end of 2028. Dow Jones Market Talk, summarising the same research, noted that lithium prices have already fallen by as much as 40 percent since early September, and that Citi’s China battery materials team channel checks point to consumers deferring purchases.
The reversal is abrupt. Only on October 7, Citi raised its global battery demand forecasts and put energy storage demand at 1,030 gigawatt hours for this year. The new note also lands as Beijing reduces support for battery exports: the value added tax export rebate on battery products was cut to 6 percent from 9 percent in April and is scheduled to be scrapped entirely on January 1.
Australian lithium shares slid on the note in Monday trade, extending a weak run for the complex: the lithium and battery sector fund fell 1.85 percent in the last United States session and Liontown fell 3.13 percent in the week to October 30 in the Australian market. For producers, a 12,000 dollar carbonate deck sits close to the cash costs of higher cost converters and brine operations, which is where supply discipline, project deferrals and consolidation pressure usually build.
The offset in Citi’s own framing is timing rather than direction. The bank expects supply to loosen further in 2027, which makes anxious sellers generous counterparties now for buyers willing to lock in multi year contracts. For developers raising money against feasibility price decks set well above 12,000 dollars, the reset is the harder problem: their studies, not the spot price, are what lenders will reprice first.