The Core Lithium Ltd (ASX: CXO) share price is falling hard today, down 12.3% in late morning trade.
The ASX lithium stock closed yesterday trading for $1.87 per share and is currently swapping hands for $1.64 per share.
So, what's going on?
Why the big fall in the Core Lithium share price?
It's not just the Core Lithium share price that's taking a big hit today.
While the S&P/ASX 200 Index (ASX: XJO) is down 0.2%, materials stocks are broadly underperforming, with the S&P/ASX 200 Materials Index (ASX: XMJ) down 1.4% at this same time.
Granted, that's a lot less ground than Core Lithium is losing. Indeed, most of the big name lithium stocks are leading the charge lower today.
The bigger pullback in the lithium stocks looks to be driven by a combination of weakness in US markets overnight combined with an absolutely smashing performance yesterday, likely leading to some profit-taking today.
Yesterday saw the Core Lithium share price close up 11.7%, meaning it's only down 1.8% from Friday's close.
Monday's surge came on the heels of news that China – the world's number two economy and a voracious consumer of lithium – is moving to scale back some of its strict COVID-zero policies.
The rolling lockdowns have thrown up headwinds for China's economic growth, and any easing should see an uptick in the Middle Kingdom's demand for a range of resources, including lithium.
Atop the easing of pandemic restrictions, news also broke that China's government will offer more support for property developers to spur some life back into its beleaguered real estate markets.
This looks to have helped send Core Lithium shares soaring yesterday, setting shares up for a big retrace today.
How has Core Lithium been tracking in 2022?
Despite the big fall today, the Core Lithium share price remains up 161% in 2022. That compares to a year to date loss of 6% posted by the ASX 200.
