ASX lithium shares had a top run on the market on Tuesday.
Core Lithium Ltd (ASX: CXO) shares rose 3.79%, while Pilbara Minerals Ltd (ASX: PLS) shares leapt 4.42%.
Meanwhile, Sayona Mining Ltd (ASX: SYA) shares jumped 2.08% and Allkem Ltd (ASX: AKE) shares leapt 3.34%. For perspective, the S&P/ASX 200 Index (ASX: XJO) climbed 0.36% today.
Let's take a look at why ASX lithium shares fared well today.
A 'tighter' lithium market
Lithium shares charged higher today amid a broker upgrade on the lithium price.
Macquarie is tipping spot lithium prices to peak at US$6,500 per tonne, the Australian Financial Review reported. Analysts said:
We believe the theme of supply security could result in lithium trading and processing reshuffles, leading to an even tighter market.
Spot lithium prices have remained buoyant.
Core Lithium and Pilbara Minerals were among the top ASX 200 shares traded by volume today.
Bell Potter has recently maintained a buy rating on the Allkem share price with a $19.45 price target. This suggests a 26% upside. Bell Potter said:
AKE is aiming to maintain 10% share of supply in a global lithium market experiencing unprecedented growth; it has a portfolio of growth projects, balance sheet strength and cash flow from existing projects to achieve this.
As my Foolish colleague Bronwyn recently reported, Argo Investments Limited (ASX: ARG) are tipping global electric vehicle (EV) sales to jump from six million in 2022 to 30 million in 2030.
Meanwhile, the Federal Government tips spodumene prices to hit US$3,280 in 2023 before easing to US$2,490 a tonne in 2024. Lithium hydroxide prices are forecast to rise to US$51,510 in 2023 before dropping back to US$37,650 in 2024.
