The Allkem Ltd (ASX: AKE) share price has been under severe selling pressure since the end of May.
After reaching an all-time high of $14.38 on 30 May, the lithium mining company’s shares are now fetching $10.15. This represents a fall of almost 30% in just three weeks.
Let’s take a look at what has happened recently with Allkem.
Allkem shares momentarily power off
Despite the company releasing a positive update earlier this month, investors have continued to offload Allkem shares.
On 6 June, the company announced strong conditions in the battery metals market, leading to increased lithium carbonate and spodumene concentrate prices.
However, negative sentiment across the industry brought on by a weakened near-term outlook for lithium has weighed down the Allkem share price.
The broker noted that fundamental mispricing has generated an outsized supply response well ahead of demand.
Because of this, Goldman Sachs forecasts a lithium price correction to as low as US$16,000 per tonne in 2023.
Currently, the going rate for lithium carbonate per tonne is around US$71,400.
When the report came out on 1 June, Allkem shares tanked 15% on the day.
And since then, its shares have recorded just four days in the green out of the last 14 trading days.
While the industry pushed back after Goldman Sachs’ report, no one knows exactly where the price of lithium will be next year.
Allkem share price snapshot
Despite coming off a horrid run, the Allkem share price has surged by 70% over the past 12 months.
However, looking at year to date, the company’s shares are relatively flat for the period, down around 2%.
Allkem commands a market capitalisation of approximately $6.25 billion.