Goldman Sachs: Expects lithium prices to peak this year and decline starting next year; cuts target prices for Ganfeng Lithium Group (01772) and Tianqi Lithium Corporation (09696)

Goldman Sachs released a research report stating that it has raised its forecast for the average benchmark price of Chinese spot lithium carbonate in 2026 by 1% to USD 18,900 per tonne, or RMB 140,000 per tonne; raised next year's forecast by 33% to USD 13,700 per tonne, or RMB 100,000 per tonne; and lowered its 2028 forecast by 31% to USD 11,000 per tonne, or RMB 84,000 per tonne. The bank noted that for most of this year, China and global lithium supply saw a shortage of about 16%, with supply and demand levels approaching balance in the fourth quarter. It expects an oversupply of 8% to 18% next year and in 2028, and therefore believes that the benchmark lithium carbonate price will peak this year and decline starting next year. Goldman Sachs accordingly adjusted its earnings forecasts for various lithium companies. For Ganfeng Lithium Group (01772), it raised its 2026 to 2028 earnings forecasts by 33%, raised them by 120%, and lowered them by 76%, respectively, maintained a "Neutral" rating, and cut its target price from HKD 46 to HKD 31. For Tianqi Lithium Corporation (09696), Goldman Sachs raised its 2026 to 2028 earnings forecasts by 14%, raised them by 45%, and lowered them by 62%, respectively, maintained a "Sell" rating, and cut its target price from HKD 33 to HKD 22. As Zijin Mining Group's (02899) lithium business contributes relatively little to earnings and has limited sensitivity to changes in the latest lithium price forecasts, Goldman Sachs made no forecast adjustments.