ASX lithium shares are bouncing back after a choppy past two weeks.
The post Why ASX lithium shares are having a bumper start to the week appeared first on The Motley Fool Australia. –
ASX lithium shares are surging across the board on Monday following a sharp drawdown in recent weeks.
What’s driving ASX lithium shares higher?
Elevated lithium demand and spot prices
Higher lithium prices continue to support the bullish performance of ASX lithium shares.
In Orocobre’s FY21 full-year results, the company highlighted an average realised price of US$8,476/tonne for its lithium carbonate, up 45% quarter-on-quarter and 117% on the prior corresponding period (pcp).
Within the results’ presentation, Orocobre pointed to growth drivers such as the electric vehicle industry which is forecast to have a compound annual growth rate (CAGR) of 20-30% for the next decade.
Orocobre reported global electric vehicle sales of 2.65 million units in June year-to-date, up 168% on the pcp, with Europe and China leading the growth.
The company also pointed at broader themes at play such as global carbon emission targets and penalties, accommodative government regulations and subsidies, and increasing electric vehicle models by vehicle manufacturers.
A return to profitability
Higher lithium prices are helping large established producers return to profitability, with China’s Tianqi Lithium Corp, one of the world’s largest lithium producers, posting its first net profit in two years.
The lithium giant reported net income of 85.8 million yuan (~A$18.2 million) for the first half of 2021 compared to a loss of 696.6 million yuan (~A$147 million) a year earlier.
The post Why ASX lithium shares are having a bumper start to the week appeared first on The Motley Fool Australia.
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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.