May was a rollercoaster ride for the Vulcan (ASX:VUL) share price

Shareholders in the ambitious lithium producer had to fasten their seat belts last month.

| More on:
Scared looking people on a rollercoaster ride representing the volatile Mineral Resources share price in 2022

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Shareholders in Vulcan Energy Resources Ltd (ASX: VUL) had a rollercoaster ride in May.

After opening the month at around $8.29, shares in the lithium producer dipped to $6.36 before recovering to finish the month relatively flat.

Let's take a look at what's been driving the Vulcan share price this past month.  

What's happening with the Vulcan share price?

Vulcan shares had an astonishing April, jumping 32% for the month. However, May proved to be far more volatile.

The 1 May price of $8.29 tumbled to a low of $6.36 by mid-May. During this period, the company didn't release any price-sensitive news that could explain the decline.

However, at the end of April, Vulcan announced the acquisition of German geothermal surface consultancy company Global Engineering and Consulting (Geo-Co). The purchase, which came at a cost of 325,000 fully paid ordinary shares in Vulcan, may explain the share price drop as investors mulled the decision.

Other factors could include a weaker spot-lithium price and investors rotating out of the resource sector.

By late May, the Vulcan share price was lifted out of its lull after the company announced another key milestone for its Zero Carbon Lithium project.

In a market update, Vulcan announced it had achieved target specification for a direct lithium extraction (DLE) feed into its pilot plant. The company noted its team was able to recover more than 90% for lithium chloride from brine in the Upper Rhine Valley.

Vulcan's management lauded the result and noted intentions to scale up lithium extraction processes. It also highlighted the company's Zero Carbon Lithium project and its strategy to supply the European battery market for electric vehicles.

Snapshot of the Vulcan share price

Vulcan is a lithium developer with its flagship Zero Carbon Lithium project located in Germany's Upper Rhine Valley. The company has the ambitious aim of becoming the world's first lithium producer with net-zero greenhouse gas emissions.

Its Zero Carbon Lithium project aims to produce battery-quality lithium products from its combined geothermal energy and lithium resource.

The Vulcan share price also reflects demand for lithium and the growing electric vehicle market. After opening the year at $2.77, shares in Vulcan flew to an all-time high of $14.20 in early January.

Since then, the Vulcan share price has waned and remained relatively flat. Despite the subdued price action, shares in Vulcan are up more than 185% year to date.  

Motley Fool contributor Nikhil Gangaram has no position in any of the stocks mentioned. 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

Miner looking at a tablet.
Resources Shares

Here is the dividend forecast to 2028 for Fortescue shares

The potential dividend payments from Fortescue could surprise you.

Read more »

Female miner smiling at a mine site.
Share Gainers

Up 834% in a year, guess which ASX mining stock is hitting new all-time highs today

The ASX mining stock has gone from strength to strength over the past year.

Read more »

Miner looking at a tablet.
Resources Shares

Little-known ASX copper share catches Gina Rinehart's attention

Australia's richest person is investing in critical minerals at a rapid pace.

Read more »

Three miners looking at a tablet.
Resources Shares

4 ASX small-cap mining insiders buying up big chunks of company shares

These companies were worthy of their directors' money in recent weeks.

Read more »

Three miners wearing hard hats and high vis vests take a break on site at a mine as the Fortescue share price drops in FY22
Resources Shares

Why the big three ASX 200 mining stocks are enjoying a banner day on Thursday

BHP, Fortescue and Rio Tinto shares are all catching some extra tailwinds today.

Read more »

Three miners wearing hard hats and high vis vests take a break on site at a mine as the Fortescue share price drops in FY22
Resources Shares

1 ASX 200 mining stock to buy and hold forever

Rio Tinto looks to me like a strong miner to own for the long term.

Read more »

A miner stands in front oh an excavator at a mine site

Two ASX 200 mining stocks to buy now for the AI revolution

I think these two ASX miners are in the sweet spot amid the booming growth of AI.

Read more »

two men in hard hats and high visibility jackets look together at a laptop screen that one of the men in holding at a mine site.
Resources Shares

ASX 200 mining giants' copper project cops setback

BHP and Rio Tinto are struggling to get the go-ahead for a US copper mine.

Read more »