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).