ASX lithium shares lift as spot prices hit all-time highs

Lithium spot prices continued to gather momentum in the last two weeks of September.

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ASX lithium shares are charging higher on Tuesday as lithium prices reached all-time highs amid limited supply and elevated demand.

ASX 200 lithium heavyweights Orocobre Limited (ASX: ORE) and Pilbara Minerals Ltd (ASX: PLS) are up 1.4% and 3.8% respectively.

Towards the more speculative end of town, Piedmont Lithium Inc (ASX: PLL), Charger Metals NL (ASX: CHR) and Argosy Minerals Limited (ASX: AGY) are big winners today, up 6.2%, 10.5% and 3.8% respectively.

Not all gains are made equal, however, with players such as Liontown Resources Ltd (ASX: LTR), Firefinch Ltd (ASX: FFX) and Core Lithium Ltd (ASX: CXO) underperforming in today’s session so far, down a respective 0.7%, 2.4% and 1.2%.

Runaway spot prices drive ASX lithium shares higher

According to Benchmark Mineral Intelligence, prices for battery-grade lithium carbonate rose 26.5% in China to 160,000 yuan (US$24,800) a tonne in the final two weeks of September.

This marks a new all-time high for battery-grade lithium carbonate prices, surpassing 2018 highs of US$24,750 a tonne.

Prices have jumped on the back of strong demand from China, with demand for lithium-ion batteries “remaining high and steady after a year of significant growth”.

Looking ahead, Benchmark Minerals said that record prices are “likely to incentivise a strong upward revision of contract prices in Q4 as new deals and pricing breaks are negotiated for the start of 2022”.

It also observed that supply contracts negotiated in the fourth quarter can be influenced by spot market sentiment.

“It is this revision that sparked the surge in lithium chemicals pricing in 2015, indicating that the start of 2022 could see further momentum in price rises,” the report added.

The bullish performance of lithium has helped buoy ASX lithium shares.

The broader sector has cooled off in recent months with many shares trading 15-20% below recent multi-year or all-time highs.

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