There's no denying that the lithium industry is hot right now.
In fact, some of the returns that have been generated in the industry this year are staggering when you consider that the ASX 200 index has dropped almost 12% year to date.
The good news is that you're not too late to the party. Listed below are two ASX lithium shares that have been tipped as buys:
Allkem Ltd (ASX: AKE)
The first ASX lithium share to look at is Allkem. It is a top five global lithium miner with a collection of world class operations.
From these operations, the company recently revealed plans to increase its production three times over by 2026. This is expected to allow Allkem to maintain a 10% share of the global lithium market over the next decade.
Macquarie is very bullish on Allkem. Earlier this month, the broker put an outperform rating and lofty $21.00 price target on its shares. Its analysts like the company due to its plan to triple production by 2026 and even see potential increases beyond this.
Pilbara Minerals Ltd (ASX: PLS)
Another ASX lithium share that has been tipped as a buy is Pilbara Minerals.
This lithium giant is the company behind the Pilgangoora Lithium-Tantalum Project, which is located approximately 120kms from Port Hedland in the Pilbara region of Western Australia.
In FY 2022, Pilbara Minerals produced 377,902 dmt of spodumene concentrate. This and sky high lithium prices underpinned stellar sales and profit growth.
The good news is that management isn't resting on its laurels. Like Allkem, it is aiming to capitalise on strong lithium prices with material production growth. Management is aiming to grow its production to 1 million dmt per annum in the coming years.
The team at Macquarie is also very positive on Pilbara Minerals. Earlier this week, the broker reiterated its outperform rating and $5.60 price target on the company's shares. Macquarie was impressed with Pilbara Minerals' latest lithium auction and believe the strong pricing reflects tight market conditions.
