ASX lithium shares are in the spotlight as lithium looks to have upended toilet paper in a global 'panic buying' spree.
Demand for the metal, a crucial element in most electric vehicle (EV) batteries, is surging alongside the rapid growth in EVs.
With new supplies failing to meet the ramp-up in demand, lithium prices are rocketing as global battery manufacturers compete to secure enough inventory, piquing investor interest in ASX lithium shares.
Image source: Getty Images
Why isn't more supply coming online?
As news.com reports:
Prices for lithium salts, lithium carbonate, and lithium hydroxide rose by between 400-500 per cent last year, and show no signs of slowing down as supplies struggle to keep up with demand.
Indeed, in the mid-term, Saxo Capital Markets Australian market strategist Jessica Amir expects lithium prices will increase by another 80% this year.
Those figures will come as welcome news to leading ASX lithium shares like Pilbara Minerals Ltd (ASX: PLS), Mineral Resources Limited (ASX: MIN), and Allkem Ltd (ASX: AKE).
But there are tailwinds at work here as well.
Restrictions put in place to mitigate the spread of COVID-19, including a largely closed Western Australia border, have brought about significant labour shortages for the mining industry.
With those concerns in mind, as the Motley Fool reported last week, Pilbara's management cautioned "that it is reviewing its FY 2022 guidance for production of 400,000 to 450,000 dmt and shipments of 380,000 to 440,000 dmt."
Guidance may well be revised downwards.
How have these ASX lithium shares been performing?
Amid the rocketing lithium prices, Allkem's share price has soared 88% over the past 12 months.
Competing ASX lithium share Mineral Resources, meanwhile, is up 57% since this time last year.
And the Pilbara share price has rocketing an eye-popping 227%.
For comparison the S&P/ASX 200 Index (ASX: XJO) has gained 4% over that same time.
