The market may be struggling to stay in the black on Friday, but one area of it that certainly isn't short of gains is the lithium industry.
A good number of shares in the industry, except for Avz Minerals Ltd (ASX: AVZ) for reasons detailed here, are pushing notably higher on Friday.
Here is the state of play this afternoon:
- The Galaxy Resources Limited (ASX: GXY) share price is up 5% to $3.03.
- The Kidman Resources Ltd (ASX: KDR) share price has climbed 2.5% to $1.90.
- The Lithium Australia NL (ASX: LIT) share price is up 3.5% to 14.5 cents.
- The Orocobre Limited (ASX: ORE) share price has pushed 5.5% to $5.01.
- The Pilbara Minerals Ltd (ASX: PLS) share price has edged 0.5% to 81.5 cents.
Why are the lithium miners pushing higher?
Surprisingly, there doesn't appear to be a single catalyst for today's push higher.
I suspect today's gains can be attributed to a combination of bargain hunters coming in after recent share price weakness, strong gains from overseas lithium miners overnight, and positive developments in the electric vehicle market.
Overnight the shares of FMC Corp, Albermarle, and Sociedad Quimica Y Minera (SQM) all rose strongly as investors returned to the space.
News that Peugeot owner PSA has created a new business unit may have helped with sentiment. The new business unit will be dedicated to electric vehicles and will support its efforts to offer all of its car models with electric options by 2025.
In addition to this, there are reports that Chinese electric vehicle start-up Singulato Motors has raised US$2.39 billion to fund its massive manufacturing hub in Suzhou over the next five years. This is just one of many Chinese automakers aiming to crack the electric vehicle market.
Is it time to invest?
While the lithium miners are high risk investments, if your risk profile allows it, I would consider a small investment in Galaxy. I think it is the best-positioned miner to profit from the high lithium prices and trading at an attractive level following recent share price weakness.
