ASX lithium shares are surging to the moon on Thursday
The post Why ASX lithium shares are booming on Thursday appeared first on The Motley Fool Australia. –
It has been a bumper day for ASX lithium shares, with many players surging double digits and breaking out to fresh all-time highs.
Australia’s next lithium producer Core Lithium Ltd (ASX: CXO) jumped 20% to fresh all-time highs of 57 cents.
Firefinch Ltd (ASX: FFX), which has partnered with Chinese lithium giant Jiangxi Ganfeng Lithium to progress its Goulamina Project, rallied 5.74% to 65.4 cents.
Other notable ASX lithium shares, all of which are explorers include Argosy Minerals Limited (ASX: AGY), Lake Resources N.L. (ASX: LKE) and Avz Minerals Ltd (ASX: AVZ), closed Thursday’s session up a respective 13.1%, 2.7% and 3.3%.
What’s driving ASX lithium shares?
Lithium is expected to play a vital role in the global transition towards net zero emissions.
Lithium prices have already rallied beyond 2018 highs, with Benchmark Minerals Intelligence reporting that Chinese battery-grade lithium carbonate surged 26.5% in the final two weeks of September to 160,000 yuan (US$24,800) a tonne.
This has in turn brought many ASX lithium shares from multi-year lows in late 2020 to all-time highs in recent weeks.
This might only be the tip of the iceberg.
The International Monetary Fund (IMF) released its world economic outlook report this month, citing that:
In the IEA’s Net Zero by 2050 emissions scenario,total consumption of lithium and cobalt rises by a factor of more than six, driven by clean energy demand.
From a pricing perspective, the report said:
Results show that prices would reach historical peaks for an unprecedented, sustained period under the Net Zero by 2050 emissions scenario. The prices of cobalt, lithium, and nickel would rise several hundred percent from 2020 levels and could delay the energy transition.
This could make lithium a very lucrative business and bode well for both established players and prospective explorers.
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Motley Fool contributor Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. 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.