The Vulcan Energy Resources Ltd (ASX: VUL) share price plunged by a considerable amount today.
Shares in the zero-carbon lithium explorer were down 7.21%, trading at $8.11 at the close of trade on Wednesday.
It seems that even the euphoria of booming lithium demand can't match the moves made by the broader US market overnight. The prospect of interest rates rising next week and inflation numbers coming in higher than expected appears to be on everyone's mind.
The sell-off rippled through to ASX shares, with the vast majority of the market seeing red in afternoon trade.
All ASX indices were down at the close today, with the S&P/ASX 200 Index (ASX: XJO) experiencing a 2.58% contraction in its value.
Zooming in on today's performance of ASX lithium shares, we can see that damage was inflicted on the sector, with Vulcan emerging as the biggest loser of its peer group this afternoon.
The Mineral Resources Limited (ASX: MIN) share price closed 3.18% lower. Shares in Pilbara Minerals Ltd (ASX: PLS) and Allkem Ltd (ASX: AKE) followed close behind, posting 3.16% and 3.06% losses, respectively.
No announcements from Vulcan explain why the company took a bigger hit than its lithium peers today. But there have been some developments in the recent past. Let's cover the highlights.
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What's going on with the Vulcan share price?
Some positive developments emerged for lithium and spodumene concentrate on Tuesday. Bell Potter analysts gave guidance estimates for the materials and stated that a widening supply and demand imbalance was tipped in favour of lithium producers.
Vulcan posted a market update the same day claiming that construction has started for its Sorption-Demo Plant in Landau, Germany.
Vulcan Energy managing director and CEO, Dr Francis Wedin, commented:
We are excited to begin onsite construction of our Sorption-Demo Plant, which is the logical next step for us to continue upscaling towards commercial production of lithium hydroxide with a net zero carbon footprint.
We are also encouraged with continuing receipt of environmental approvals from the authorities, and mobilisation of teams for commencement of "on the ground" seismic survey activities, toward our goal of developing a much larger geothermal renewable energy and Zero Carbon Lithium business.
In August, Alster Research gave Vulcan shares a price target of $20 each, which it's expected to reach in the next 12 months. That's a 140% upside at the time of writing.
These factors culminate in Vulcan's lithium production potentially trading at a 'green premium' in the future.
Vulcan share price snapshot
The Vulcan share price is down 25.18% year to date. At the same time, the ASX 200 is down 10.03% over this period.
The company's market capitalisation is $1.16 billion based on its closing share price today.
