Analysis by First Berlin Equity Research Advises Buy Rating for European Lithium Limited

First Berlin Equity Research GmbH has issued a research update on European Lithium Limited, maintaining a Buy recommendation for the Australia-based company with a target price of €0.17. The analysis underscores the dynamic nature of the lithium market, noting a fourfold price increase for lithium chemicals during 2021 and 2022 as electric vehicle (EV) sales surged. The report, led by analyst Simon Scholes, points out a significant price collapse in early 2023 by approximately 80% due to a rise in supply and destocking activities among Chinese electric battery manufacturers.

The update also comments on the cyclical behavior of the lithium market, suggesting that the current low prices may eventually lead to a moderation in supply growth. Recent increases in lithium commodity prices, triggered by major miners delaying capacity expansions, signal a potential trend shift. The consultancy Benchmark Minerals Intelligence projects a resurgence in the lithium demand, with EV sales anticipated to quadruple by 2033 and a projected market deficit by 2029, coinciding with the expected full capacity of the Wolfsberg Lithium Project.

European Lithium's involvement in the Tanbreez rare earths/metals project in Greenland, the largest of its kind globally in terms of in-situ rare earth oxides, is highlighted as a significant asset. With a potential Nasdaq listing in 2025, shareholders might have an opportunity to increase their stakes in this project. Scholes confirms the Buy rating for European Lithium, adjusting the AUD price target to AUD0.28 from the previous AUD0.25.