Some analysts say that the price of lithium could have reached a maximum. Photo Meridith Kohut / The New York Times
Shares of lithium producers plummeted in Asia after the Argentine government decided to shut down alleged inadequate pricing practices by exporters, compromising trust throughout the industry.
Customs set a reference price of $ 53 per kilo for lithium carbonate exports avoid under-billing and improve transparency, according to the federal tax agency.
The actions of lithium producers have also been influenced by the growing notion that material prices will peakafter Credit Suisse Group joined Goldman Sachs Group in expecting a correction.
In Australia, Allkem (result of the merger between Orocobre and Galaxy Resources) dropped up to 15%, while China’s Ganfeng Lithium fell more than 4% before matching its decline. Both have operations in Argentina. After these declines, analysts they expect there will also be an impact on US companies in the industry.
There are major metal mining projects in the country, highly sought after such as key entry for batteries and electric vehicles.
The reference price “is essentially a mechanism by which customs require the integrity of contractual prices where there is a large variation,” write Citigroup analysts.
Shares fell across the region. Pilbara Minerals fell more than 20% and mineral resources lost up to 8.7%. China’s Tianqi Lithium fell more than 6% before evening the losses.
Lithium manufacturers have benefited from the global increase in demand for electric vehicles, which has pushed prices up and relieved scarcity fears.
Argentina currently has the largest lithium project portfolio in the world. Its exports of lithium carbonate has exceeded 27,000 tonss last year, with about 185 million dollars.
However, some analysts have begun to predict that the market has peaked.
Credit Suisse analysts led by Matthew Hope said they believe it “The escalation in lithium prices is coming to an end and prices will start to decline, ”as the supply shortage appears to end.
The company lowered its price targets and valuations on Allkem and Pilbara, urging investors to make profits.
His decision comes just days after Goldman Sachs’ predictions a “sharp correction” in lithium prices for the next two years.
Wall Street firm sees bull market for battery metals “it’s over for now”according to a May note, as investor euphoria led to oversupply.
NEITHER
Source: Clarin
