Image source: Shutterstock

Highlights

  • Mineral Resources drops 12%, hitting lowest level since March 2020; Pilbara and IGO also fall sharply

  • Citi lowers price targets for PLS, IGO, and MIN citing pressure from U.S. reciprocal tariffs

  • Despite cuts, Citi upgrades PLS and IGO to "buy", naming Pilbara as top lithium pick

Shares of leading Australian lithium miners tumbled today, weighed down by a combination of analyst downgrades and global trade concerns. The sharpest fall came from Mineral Resources (ASX:MIN), which plunged 12% to AU$14.41, marking its lowest trading level since March 2020. The stock ranked among the worst performers on the benchmark S&P/ASX 200 Index (XJO).

Fellow lithium producers Pilbara Minerals (ASX:PLS) and IGO Ltd (ASX:IGO) also posted notable declines, falling 6.4% and 3.6%, respectively, as investor sentiment soured across the sector.

The slump came after Citi revised its outlook for Australian lithium stocks, trimming price targets across the board due to expectations that recently announced U.S. reciprocal tariffs could dampen global demand for electric vehicle (EV) components and materials, including lithium.

Citi cut its price target for Pilbara to AU$1.65 from AU$2.40, IGO to AU$4.00 from AU$5.30, and Mineral Resources to AU$20.00, citing macroeconomic and trade-related headwinds.

Despite the reduced targets, Citi upgraded its rating for both Pilbara and IGO to “buy” from “neutral”, signalling confidence in their long-term positioning. The bank also named Pilbara Minerals as its top pick among lithium producers, highlighting its operational resilience and future growth potential amid a turbulent market.

The lithium sector has faced mounting challenges in 2024, with commodity prices retreating from pandemic-era highs and increased geopolitical uncertainty affecting investment decisions. U.S. tariffs, aimed at reducing reliance on Chinese supply chains, are now seen as a potential drag on global EV momentum, which in turn affects upstream lithium producers like those based in Australia.

So far this year, Mineral Resources has lost nearly 58% of its market value, while Pilbara Minerals and IGO shares have fallen around 41% and 33%, respectively, even before factoring in the latest losses. These sharp declines reflect the broader investor caution over future lithium pricing and demand volatility.