Orocobre shares have now doubled in 2021.
The post Why the Orocobre (ASX:ORE) share price is up 9% to an all-time record high on Tuesday appeared first on The Motley Fool Australia. –
The Orocobre Limited (ASX: ORE) share price is up a staggering 10.84% on Tuesday to record highs of $9.51.
Its stellar performance comes off the back of a surging lithium sector with ASX 200 heavyweights Galaxy Resources Limited (ASX: GXY) and Pilbara Minerals Ltd (ASX: PLS) surging 11.07% and 10.84% respectively.
Broker slaps buy ratings on all its lithium stocks
This morning, the broker was overweight on all five lithium players, according to the Australian Financial Review.
This renewed bullishness was underpinned by the view that “there will be 19 per cent a year increase in demand for lithium over the coming 10 years, on a compound annual growth rate basis, based on demand for electric vehicles and batteries.”, according to JPMorgan analysts.
“That means supply will struggle to keep up, and the analysts said they would see a deficit beyond 2030.”
The conviction from JPMorgan analysts seems to have resonated strongly with the record setting Orocobre share price on Tuesday.
Mega merger on the horizon
On 6 August, Galaxy Resources shareholders voted in favour of the merger with Orocobre.
The next step for Galaxy is to receive approval from the Supreme Court of Western Australia.
If all goes to plan, the implementation scheme is expected to be complete on Thursday, 26 August.
The merged entity will rebrand under a new name, which will be announced in due course.
The merger will position the combined group as a top 5 global lithium chemicals company, with a highly complementary portfolio of assets across Argentina, Australia, Canada and Japan.
Orocobre share price snapshot
With today’s 10% jump, the Orocobre share price has now doubled in 2021.
The company’s market capitalisation has ballooned to just shy of $3 billion.
Post-merger, the combined entity would have a valuation of about ~$5.6 billion.
Not far off Pilbara Minerals’ $6 billion.
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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.