Citi is bearish on lithium – not less than in the near future. That is because China’s massive electric vehicle market is showing signs of slowing down, the bank said, citing the country’s withdrawal of subsidies for electric vehicles and the suspension of Tesla’s production at its Shanghai plant. Lithium is a key ingredient in electric vehicle batteries. As well as, demand in Europe is falling on account of high electricity prices and the economic slowdown, the bank added. “[We] watch out with lithium, saying the long term outlook is optimistic. Lithium demand is expected to extend by around 20% by 2030, and lithium supply will struggle to catch up. Names to observe Citi listed three stocks to observe despite a cautious outlook for lithium. Its most preferred name is US-based Albemarle, with a price goal of $295, up 38%. Citi also likes the Living Corporation, with a price goal of $27, up 42%. But he warned that Livent, as a pure-play lithium producer, is an organization sensitive to changes in the lithium market. “Lithium has high growth potential driven by demand for battery applications. Due to this fact, changes in the pace of adoption of electrical vehicles or electronics, brought on by energy prices or other aspects, could have significant implications for the long-term supply/demand of lithium,” Citi analysts wrote. The bank added that since Livent’s business is heavily depending on lithium resources in Argentina, Salar del Hombre Muerto, any political or economic risk in that country would affect the company. For instance, Argentina recently imposed an export tax on some products, including lithium, Citi noted. Citi also named Sociedad Química y Minera de Chile the world’s largest lithium producer, growing 58% in 2022. In mid-December, Citi downgraded the stock from “buy” to “neutral”, setting a price goal of $92 – a rise of about 20%. Nevertheless, the bank expects more risk for the company, citing price volatility as the important risk for this objective. “Prices for SQM products are tied to international prices, which vary significantly on account of supply/demand dynamics. Citi said.(*3*)