Orocorbe Ltd (ASX: ORE) and Galaxy Resources Limited (ASX: GXY) shares tumbled yesterday as industry reports continue to suggest the lithium price has been on a steady downward trajectory. There’s no benchmark, spot or futures-based exchange traded price for lithium, unlike other commodities such as iron ore, gold, copper, or oil which adds to the volatility in lithium prices.
According to news reports in global mining industry journal Mining.com: “Despite the lofty expectations for demand from electric vehicles where lithium-ion batteries dominate, prices for the raw material have been in relentless decline for the last 18 months.”
The journal reports that certain lithium grade prices out of South America dropped 27% for the year to June, with certain lithium grade prices out of China and Australia posting even worse falls.
As there’s no benchmark price (due to their being different grades and constituents of lithium) with no exchange traded price (due to lack of regular volume) industry sources are reliant on miners self-reporting prices achieved to get a handle on spot prices.
Therefore investors in the likes of Pilbara Minerals Limited (ASX: PLS), Kidman Resources Ltd (ASX: KDR), Argosy Minerals Ltd (ASX: AGY) AVZ Minerals Ltd (ASX: AVZ), Galaxy and Orocobre should expect more volatility over the 12 months ahead.
BRAND NEW! For a limited time, The Motley Fool Australia is giving away an urgent new investment report with all the details on our #1 BANK STOCK for the next 12 months and beyond…
Now, if you’ve been around this site for any length of time, you know The Motley Fool usually shuns bank shares.
But we’ve recently discovered a ‘hidden in plain sight’ bank stock with what we think is mouth-watering potential.
With the company boasting nearly 25% net profit growth every year for the last 5 YEARS…
And the shares paying a fully franked dividend that beats the pants off term deposits!
So if you like steady, high-growth income plays – we’ve got you covered!
You’re invited. Simply click the link below to discover our #1 ASX bank stock to profit in 2019. To scoop up your FREE copy, simply click the link below right now. But you will want to hurry – this free report is available for a brief time only.
You can find Tom on Twitter @tommyr345
The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.