The Orocobre Ltd (ASX: ORE) share price has been surging higher to start the week.
The lithium miner’s shares are up 8.12% in the last 2 days to be leading the ASX 200 gainers this week.
So, why are Orocobre shares rocketing higher, and is December the best time to buy?
Why Orocobre shares are surging higher this week
The Orocobre share price explosion has happened despite no market-moving news from the Aussie miner.
However, lithium was thrust into the spotlight on December 8 thanks to a Nobel Prize winner.
Japanese chemist Akira Yoshino gave a Nobel lecture on Sunday and mentioned that lithium-ion batteries “will play a central role” in long-term sustainability.
The winner of a 2019 Nobel Prize in chemistry said battery technology is vital to a sustainable society of the future.
Orocobre shares rocketed higher after the speech on Monday as investors look to cash in on the lithium “pure play” stock.
The momentum continued on Tuesday as the miner’s shares soared a further 3.69% higher to $2.53 per share.
How has the lithium miner performed on the ASX this year?
Despite gaining 8.12% in the last two days, Orocobre shares have a long way to go.
The group’s share price remains 20.19% lower than where it started the year at $3.16 per share.
However, it’s far from the only ASX lithium stock to be struggling in 2019. Weak demand and concerns of oversupply have seen lithium prices plummet lower this year.
That has caused Galaxy Resources Ltd (ASX: GXY) shares to fall a whopping 59.82% lower since 2 January. Fellow lithium miner Pilbara Minerals Ltd (ASX: PLS) has fared even worse, plummeting 64.38% lower this year.
Should you buy Orocobre shares in December?
Despite the recent gains, I think the fundamental environment for lithium remains too volatile.
Until we see real progress on the demand side, such as significant electric vehicle uptake, lithium stocks could struggle.
I think there’s too many suppliers and not enough buyers, but there are signs that could be changing, with Tesla’s super battery projects a prime example.
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Motley Fool contributor Kenneth Hall has no position in any of the stocks mentioned. 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 Scott Phillips.