Wall Street Bank anticipates that the surplus supply of three critical minerals and the slowdown in the electric vehicle market in Western countries will continue to drive prices down in the mid-term.

U.S. investment bank Goldman Sachs forecasts a double-digit decline in the prices of three critical minerals essential for the energy transition - cobalt, nickel, and lithium - over the next 12 months. The bank said it based its forecasts mainly on falling demand from the electric vehicle industry in Western countries and an oversupply of these minerals.

“Despite the significant downside in battery metals prices, with nickel, lithium, and cobalt prices down 60%, 80%, and 65% from cycle peak, respectively, we believe it is too early to call a decisive end to these respective bear markets,” Wall Street analysts wrote in a research note to clients.

They also reported that margin pressures have already produced a significant degree of supply rationing effects over the last quarter of the past year. However, the expected surpluses in 2024 remain substantial amid declining demand from the electric vehicle industry in Western countries, they added.

Over the next 12 months, Goldman's analysts expect price declines of 12%, 15%, and 25% for cobalt, nickel, and lithium carbonate, respectively. These three metals are notably used in manufacturing batteries for electric vehicles, wind turbines, and solar panels.