Why has the Australian Vanadium share price crashed 31% in a month?

Australian Vanadium shares are falling out of the sky. What's gone wrong?

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Key points

  • It was only last month that Australian Vanadium shares were hitting the roof
  • But today, the company is down more than 30% in a month
  • So why has investor sentiment for Australian Vanadium gone through the floor?

Last month, we looked at the Australian Vanadium Ltd (ASX: AVL) share price and how this vanadium hopeful's shares had rocketed more than 160% over the preceding month. At the time, Australian Vanadium had soared more than 16% in one day, meaning its shares had risen from 4 cents per share to almost 12 cents.

Well, as it turns out, that was about as good as it got for Australian Vanadium. Today, the company is trading 3.5% down for the day so far at a share price of 5.5 cents. That means this company has fallen by around 31% over the past month alone. Since its new all-time high of 12 cents a share that we saw on 4 April, the company has now dropped by 50%. Ouch.

Why has the Australian Vanadium share price crashed more than 30% in a month?

So, what's going on with this vanadium company? Well, as we covered last month, what really seemed to set investors onto Australian Vanadium shares was the March announcement that the company would be awarded a $49 million grant from the federal government's Modern Manufacturing Initiative.

As we noted at the time, investors seemed to be flocking to 'green metals' shares such as lithium and cobalt. And vanadium looked set to join the list. Vanadium does indeed have potential uses in next-generation battery technology. Some experts believe vanadium can enable batteries known as 'redox flow batteries', which have the potential to last for more than 20 years, with little loss of charging capacity.

But unfortunately for investors, enthusiasm for green metals and the companies that mine or produce them, has waned dramatically over the past month. Lithium shares that were red hot only weeks ago, such as Pilbara Minerals Ltd (ASX: PLS) and AVZ Minerals Ltd (ASX: AVZ), have seen steep falls in value recently. We've seen this trend extend right across most ASX metals and mining shares for that matter. So it's probably for this reason that Australian Vanadium shares have had such an awful month.

Even so, the Australian Vanadium share price remains up a pleasing 83% in 2022 so far, and up 175% over the past 12 months.

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. 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 Scott Phillips.

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