Why the Orocobre (ASX:ORE) share price is at a 52-week high

The Orocobre (ASX: ORE) share price is now up 47% year to date. So, what’s been driving the Aussie lithium share higher lately?

| More on:
A young man pointing up looking amazed, indicating a surging share price movement for an ASX company

Image source: Getty Images

Orocobre Limited (ASX: ORE) shares are having a bumper time on the ASX of late. Shares in the lithium miner jumped 5.1% higher yesterday even as the S&P/ASX 200 Index (ASX: XJO) slid 0.2% lower to 7,045.60 points.

That means the Orocobre share price is now up 46.7% in the year to date after closing at $6.66 yesterday. So, what’s driving the Aussie lithium share higher this year?

Why the Orocobre share price is on fire

It’s worth mentioning that it hasn’t all been good news for Orocobre shareholders in recent times. The Orocobre share price had been sliding from January 2018 until mid-2020. However, the tides seem to be turning in the early part of this year.

Increasing demand for electric vehicles, and the meteoric rise of Tesla Inc. (NASDAQ: TSLA), have certainly helped. It seems the electric vehicle market has well and truly kicked back into gear after sitting quietly for some time.

That has been good news for lithium demand given the importance of the raw material in making lithium-ion batteries. According to a release from global ratings agency S&P Global Inc, lithium prices continue to rise. In fact, lithium carbonate CIF Asia prices rose 11% in March to US$10,000 per tonne – the largest monthly increase since January.

That was good news for the Orocobre share price which surged higher in yesterday’s trade. Strong plug-in electric vehicle demand in China and general recovery in ex-China auto sales have also been positives for lithium prices.

That has investors piling into the Aussie lithium mining share like there’s no tomorrow. That’s despite S&P Global forecasting lithium prices to edge lower in the June quarter to US$9,900 per tonne.

The current pricing environment is a remarkable turnaround from as recently as December 2020. That has sent the Orocobre share price surging alongside rivals like Galaxy Resources Limited (ASX: GXY) and Pilbara Minerals Ltd (ASX: PLS).

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of August 16th 2021

Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends Tesla. 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.

More on Resources Shares