What are Vulcan investors ecstatic about? We take a closer look
The post The Vulcan Energy (ASX:VUL) share price is rocketing 14% higher appeared first on The Motley Fool Australia. –
The Vulcan Energy Resources Ltd (ASX: VUL) share price is ending the week in style. The lithium developer’s shares are rocketed 14% higher today after a week of positive announcements.
It has been a stellar month for the company as lithium prices continue to rise, with expectations of further tailwinds. In the past month, Vulcan shares have delivered a 60% return to shareholders.
Let’s take a look at what’s charging the excitement.
Investors are bidding up the Vulcan share price leading into the weekend. This follows two notable announcements during the week.
Firstly, on Monday the company revealed its Zero Carbon Lithium Project will produce negative carbon emissions. This was a result of updated data fed into Vulcan’s life cycle assessment.
According to the new data, the lithium project located in western Germany is expected to produce more renewable energy than it would consume in the process. Potentially lucrative, the company plans to export the excess to the German electricity grid. The announcement sent the Vulcan share price roaring ahead on the day.
Secondly, another offtake deal was penned on Monday. In addition to the offtake agreement signed with LG Energy Solution last week, Vulcan can now count Renault as another partner.
According to the release, the agreement will see Renault purchase between 6,000 tonnes and 17,000 tonnes of lithium per annum for 5 years.
Positive lithium potential boosts Vulcan share price
Adding to the positive outlook for Vulcan, analysts at Macquarie are forecasting further momentum in spodumene prices. Optimistic expectations from the analysts follow spodumene prices cracking US$1,000 a tonne. Spodumene is a mineral that contains a source of lithium.
Additionally, the broker explained that global electric vehicle (EV) sales surged 153% year-over-year (YoY) in June to 540,000. Similarly, EV sales came to 2.4 million in the first half — an increase of 161% YoY.
However, the commodities strategy team at Macquarie is forecasting 2021 full-year sales to come in between 4.8 million and 5.3 million.
Rising tide lifts all boats
Thanks to the positive outlook for the lithium sector as a whole, the Vulcan share price is not the only one enjoying a strong performance today. Other ASX-listed lithium developers and producers enjoying the ride on Friday include:
Piedmont Lithium Inc (ASX: PLL) up 5.33% to 79 cents per share,
Pilbara Minerals Ltd (ASX: PLS) up 3.47% to $2.09 per shares, and
Lake Resources NL (ASX: LKE) up 13.04% to 64 cents per share.
All of the above lithium companies have skyrocketed from their respective price points a year ago. The Vulcan share price is now an astonishing 2,300% above where it was a year ago.
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Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Piedmont Lithium Inc. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.