The Orocobre Limited (ASX: ORE) share price is on fire in 2021. After years of slipping lower, shares in the Australian lithium miner are rebounding, and in a big way.
Orocobre's market capitalisation has swelled to $2.4 billion after climbing 1.6% higher on Thursday. That means the Orocobre share price is now up more than 50% in 2021 alone and sitting 5% below its May 2021 record high.
What is driving the price hike?
Orocobre is a major lithium miner. In fact, it is one of the world's largest lithium chemicals producers. As is usually the case with commodity-based shares, the underlying commodity price has a lot to do with the company's valuation.
While there have been several lean years since 2018, things are looking up again. Lithium prices have skyrocketed in 2021 thanks to supply-side restrictions and surging demand. A big part of that demand has been driven by lithium-ion batteries and the electric vehicle space.
According to Trading Economics data, lithium prices are sitting at US$13,900 per tonne, up from US$6,800/t in November 2020. That's been reflected in the Orocobre share price gains we've seen in 2021. Shares in the lithium miner have surged 182% since the start of November 2020 as prices have rallied.
A broader commodities boom has also helped lift ASX energy shares higher and fuelled the S&P/ASX 200 Index (ASX: XJO) to a new record high. Concerns around global inflation and strong demand for basic materials has boosted the prices of key commodities including iron ore and oil in recent months.
The Orocobre share price has been a beneficiary of the surging lithium price with supply constraints and growing electric vehicle interest helping pull the ASX lithium share higher.
Foolish takeaway
The Orocobre share price has been on fire in 2021. Shares in the Aussie lithium miner continue to outperform its ASX 200 peers amid climbing commodities prices. That's good news for investors who are riding the wave right now.
