Short-lived $10 party for the Vulcan Energy (ASX:VUL) share price

After surging past the $10 milestone on Wednesday, shares in the lithium miner are tumbling on Thursday.

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The Vulcan Energy Resources Ltd (ASX: VUL) share price performance has had its ups and downs this week.

Shares in the emerging lithium producer rallied 10.87% on Wednesday to close at $10.20 apiece.

However, the Vulcan Energy share price has come under heavy selling pressure today, losing most of yesterday’s gains in a 9.61% slide to $9.22 at the time of writing.

Despite a brief euphoric moment above the $10 mark, the company’s shares are still up an impressive 20.5% in July and 235% year-to-date.

Vulcan Energy share price rallies in July

The lithium sector is a hot space right now, with Forbes warning of a potential “perpetual deficit” in lithium supply on the back of surging electric vehicle and battery storage demand.

The Global X Lithium & Battery Tech exchange-traded fund (ETF), comprising companies in lithium mining and refining through to battery production, surged to a new record all-time high on Monday.

Coinciding with the selloff in Vulcan Energy shares today, the Lithium ETF slumped 2.38% overnight, but is still up a solid 26.85% year-to-date.

Within the Lithium ETF’s holdings are ASX-listed lithium heavyweights Pilbara Minerals Ltd (ASX: PLS), Orocobre Ltd (ASX: ORE) and Galaxy Resources Ltd (ASX: GXY).

These household ASX lithium miners account for 1.11%, 0.93% and 0.71% respectively, of the ETF’s net assets.

Positive milestones ahead

Despite hitting a $1 billion market capitalisation, Vulcan Energy has yet to produce any of its zero-carbon lithium product.

The company is currently busy finalising pre-production milestones such as further exploration, a bankable feasibility study, securing offtake agreements and permitting.

According to Vulcan’s project timeline, construction of its zero-carbon lithium project should begin by the end of 2022 with a maiden lithium production by mid-2024.

Last Monday, the company announced that it appointed two companies to assist with the project’s definitive feasibility study (DFS).

Vulcan said it aimed to complete the DFS within the next 12 months.

In other news on Monday, Vulcan Energy announced a new exploration license for geothermal energy, geothermal heat, brine and lithium in the Upper Rhine Valley in Germany.

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Motley Fool contributor Kerry Sun owns shares of Vulcan Energy Resources Limited. The Motley Fool Australia's parent company Motley Fool Holdings Inc. 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.

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