HK Stock Market Move | Ganfeng Lithium Group (01772) falls more than 5% in early trading, lithium spot prices may face downside risks, Goldman Sachs downgrades company to "sell" rating.

Ganfeng Lithium Group (01772) fell more than 5% in the early morning trading session, dropping 5.19% to 48.26 Hong Kong dollars with a trading volume of 530 million Hong Kong dollars at the time of writing. On the news front, according to the latest research report released by Goldman Sachs, although the fundamentals of the lithium market have significantly improved and the supply-demand balance is expected to remain tight in the first half of next year, the extension of the energy storage system inventory cycle may become a counteracting factor. The bank has lowered its forecast for the China lithium carbonate benchmark spot price in the second half of 2025 to $9500 per ton, which is 14% lower than the previous expectation. Goldman Sachs has downgraded its rating on Ganfeng Lithium Group H shares from neutral to sell, citing downward risks in lithium spot prices due to short-term poor feedback from downstream markets and a slowdown in restocking. This rating adjustment covers several Chinese lithium stocks and reflects the investment bank's concerns about the medium-term supply-demand balance in the lithium market. Daiwa Securities has released a research report maintaining its "underperforming the market" rating on Ganfeng Lithium Group, with a target price raised from 23 Hong Kong dollars to 53 Hong Kong dollars, representing a 22% discount on Ganfeng Lithium Group A shares and based on improvements in H-share market liquidity. The bank stated that based on the latest supply-demand analysis, global lithium supply is expected to exceed demand by 76,000 tons and 54,000 tons in the current and next year, lower than last year's 124,000 tons. The bank believes that the lithium price in China will stabilize between 75,000 and 90,000 yuan per ton next year, higher than its previous forecast of an average selling price of 70,000 yuan per ton for Ganfeng Lithium Group in the current and next year.