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Why ASX lithium shares are surging higher on Tuesday

The lithium sector is booming as Tesla hits a US$1 trillion valuation…
The post Why ASX lithium shares are surging higher on Tuesday appeared first on The Motley Fool Australia. –

It’s another bumper day so far for ASX lithium shares. Heavyweights Orocobre Limited (ASX: ORE) and Pilbara Minerals Ltd (ASX: PLS) are among those leading the charge, up 3.6% and 7.2% respectively.

Emerging US-based lithium producer, Piedmont Lithium Inc (ASX: PLL), is surging 10% to a near 3-month high of 88 cents.

Coined as Australia’s next lithium producer, Core Lithium Ltd (ASX: CXO) is up 5.2% to 60 cents, not far off last week’s all-time high of 66 cents. This morning, Core announced that construction has kicked off for its flagship Finniss lithium project. The company said its Finniss project is the”only new Australian company forecast to initiate lithium production in 2022″.

Elsewhere, explorers including Lake Resources N.L. (ASX: LKE), AVZ Minerals Ltd (ASX: AVZ), and Liontown Resources Limited (ASX: LTR), are also catching bids, rallying 7.9%, 7.8%, and 6.7%, respectively.

What’s driving ASX lithium shares?

Lithium ETF hits fresh all-time high overnight

The Global X Lithium & Battery Tech ETF (NYSEARCA: LIT) surged 3.9% overnight to a fresh all-time high of US$91.26. The ETF is up 11.7% in October alone and 47.5% year-to-date.

The Lithium ETF invests in the full lithium cycle, from miners and refiners through to battery production and electric vehicles. Its performance provides a useful gauge as to how the overall sector is performing.

Its top holdings include the world’s largest provider of lithium for electric vehicle batteries, Albemarle, and China’s largest lithium player, Ganfeng Lithium.

The ETF has smaller allocations in ASX lithium shares including Mineral Resources Limited (ASX: MIN), Pilbara Minerals, and Orocobre.

Tesla joins the US$1 trillion club

Shares in Tesla Inc (NASDAQ: TSLA) crossed the $1,000 a share mark for the first time on record. This brought its market capitalisation to an eye-watering US$1 trillion.

The Tesla stock price surged overnight amid news rental car company, Hertz, was planning to buy 100,000 Teslas to add to its existing fleet.

The bullish news and price action for Tesla has likely propped up ASX lithium shares on Tuesday.

The post Why ASX lithium shares are surging higher on Tuesday appeared first on The Motley Fool Australia.

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More reading

ASX 200 (ASX:XJO) midday update: Crown and Pilbara Minerals surge higher

Pilbara Minerals (ASX:PLS) share price jumps 8% on POSCO joint venture news

Core Lithium (ASX:CXO) share price jumps as project construction begins

Tesla stock price rally places it in the trillion-dollar club

Here are the top 10 ASX shares today

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. owns shares of and has recommended Tesla. 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.

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