The Allkem Ltd (ASX: AKE) share price is far outperforming the market today.
Shares in the lithium miner are trading 5.24% higher to $13.155 apiece during afternoon trade. In contrast, the S&P/ASX 200 Index (ASX: XJO) is 1.03% lower at 6,974 – a smidgen above its lowest point of the day of 6,971.
There isn't any specific news today that explains Allkem's strong showing. But a strong FY22 result from fellow miner Pilbara Minerals Ltd (ASX: PLS) might be helping.
Deficits helping to power up the Allkem share price
More specifically, Pilbara Mineral's forecast of a deepening lithium deficit may be keeping the Allkem share price well supported.
Pilbara Minerals expects the shortfall in the battery-making mineral to grow to around 1.8 million tonnes by 2040.
The growing popularity of electric vehicles (EV) and the global move towards battery storage to cut emissions are the key drivers for demand growth.
At the same time, supply will struggle to keep pace which means prices could stay higher for longer, if the miner is right.
Upgrades boosting ASX lithium shares
But Pilbara Minerals isn't the only bull. Macquarie Group Ltd (ASX: MQG) also upgraded its price forecast on the commodity.
This is partly because Chinese lithium carbonate prices continue to fetch a premium over regional prices, which should play catch-up over the coming months.
Further, global EV sales are very strong with the broker estimating growth of more than 50% in 2022 over last year.
How long can the party last?
As it stands, the prices for lithium are trading near record or multi-year highs. Even if prices do not surge further but hover around current levels, it could mark big upgrades for ASX lithium shares.
On the other hand, some experts aren't as bullish about the outlook for lithium. Indeed, the saying in commodities that "nothing cures high prices like high prices" may ring true.
If the price of a commodity is high, it will prompt producers to invest in ramping up production. In turn, the increased supply then weighs on prices.
Outlook for the Allkem share price
But there's little consensus on how fast the supply-side response will be. And in the meantime, the Allkem share price, and that of other ASX lithium shares, may have room to climb further.
That seems to be the case today at least. The Mineral Resources Limited (ASX: MIN) share price and IGO Ltd (ASX: IGO) share price are up 0.93% and 0.33%, respectively.
These ASX miners will be making hay while the sun shines.
