Lithium Market Could Soften Next Year on Surplus Concerns

Dow Jones08-12

0225 GMT - There's a risk of softer lithium-market conditions in 1H 2027 as concerns about oversupply re-emerge, says Macquarie. That could be "potentially exacerbated by an accumulation of ESS [energy storage system] inventories across the value chain over the next six months," it says. To be sure, investors appear to have at least partially priced in this risk already, says the bank. Near-term conditions meanwhile "appear more constructive, underpinned by a tightening spot market and ongoing inventory drawdowns across the supply chain," Macquarie says. IGO is the bank's top pick among ASX-listed lithium stocks. Macquarie cites attractive free cash flow yields across varying lithium-price scenarios. IGO shares are up 2.8% at A$8.02.

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