The Orocobre Limited (ASX: ORE) share price is one to keep a close eye on right now. Shares in the Aussie lithium chemical producer jumped 7.4% higher yesterday and are now up 20.1% in 2021 alone.
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Why is the Orocobre share price surging right now?
It usually pays to look at ASX announcements when shares are on the move. For Orocobre, however, there have been no major announcements since its half-year results released on 26 February 2021.
Orocobre reported significant cost reduction for the half-year ended 31 December 2020 with the cost of sales coming in at US$3,777 per tonne thanks to increased operational efficiency.
Production levels fell 9% to 6,079 tonnes due to coronavirus restrictions while sales soared 21% higher to 7,738 tonnes. Heightened focus on the electric vehicle market has put lithium producers like Orocobre back in the spotlight after years of weakening market conditions.
The Orocobre share price has soared 139.7% higher in the last 12 months compared to a 33.1% gain for the S&P/ASX 200 Index (ASX: XJO).
One of the biggest factors driving Orocobre's valuation higher is macro rather than micro. Global lithium prices have been surging and are approaching a 2-year high. This comes as the electric vehicle push gains momentum around the world from producers, consumers and regulators.
March 2021 saw a particularly strong period for lithium prices. That helped propel the Orocobre share price towards its current $5.37 per share level.
It's not just Orocobre that is experiencing gains. Australia has a number of large lithium companies including Galaxy Resources Ltd (ASX: GXY) and Pilbara Minerals Ltd (ASX: PLS).
All three of these lithium producers have been surging in value with strong support for the electric vehicle movement from US President Joe Biden and a growing frenzy around Tesla Inc (NASDAQ: TSLA) shares in the last 12 months.
Foolish takeaway
Anytime an ASX 200 share surges 7.4% in one day, it's worth keeping an eye on. The Orocobre share price has performed strongly in 2021 and is now just 12.8% shy of a new 52-week high.
