The Sayona Mining Ltd (ASX: SYA) share price is falling today.
Shares of the lithium producer are currently trading for 24.3 cents each, a drop of 1.22% on Wednesday's closing price.
The materials sector is also struggling today and is currently one of the worst-performing sectors in afternoon trade on Thursday. The S&P/ASX 200 Materials Index (ASX: XMJ) is down 0.98%, while the S&P/ASX 200 Index (ASX: XJO) is falling 0.31%.
However, despite today's fall, Sayona shares are up 75% this year to date. So is it time to cash in? Let's cover the highlights of where the Sayona Mining share price could be heading.
What's going on with Sayona?
Sayona Mining's rating was downgraded by bank Clarksons Platou this afternoon. The company changed its position on the share recently by rating it as a 'new sell'.
At face value, it might be hard to imagine why some experts believe its shares could be in for a downturn. The company has posted consistently positive developments in its fundamentals in the recent past, and its outlook for FY23 remains positive.
One thesis that my Fool colleague James posted in October is that investors could be taking this opportunity to take profits in their investments.
Then there's the outlook for lithium prices in China. S&P Global predicts that lithium carbonate and hydroxide prices will continue their bull run to the end of the year, with some estimates stating prices will exceed Yuan 600,000/mt by January 2023.
However, the company also notes that production is expected to slow down during the quiet winter period, which could be a factor that's being priced into some lithium shares.
This might explain why some shares like Sayona have been shorted by bears. The company recently made the list of the top ten most-shorted ASX shares with a short interest ratio of 8.9% at the time of writing.
Sayona Mining share price snapshot
The Sayona Mining share price is up 75% year to date and 60% over the past year. That's beating the ASX 200 by a huge margin — it's down 8% and 6% over the same timeframes.
The company's market capitalisation is around $2.03 billion.
