Why are ASX 200 investors so obsessed with Core Lithium shares right now?

The lithium favourite has certainly made its mark this year.

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Key points
  • Core Lithium has constantly been among the ASX 200's most popular shares in 2022
  • Its popularity might be due to its position as an up-and-coming lithium producer, with its maiden shipment expected in early 2023
  • The company's short-lived agreement with electric vehicle giant Tesla also likely drew the market's attention

Are S&P/ASX 200 Index (ASX: XJO) investors obsessed with Core Lithium Ltd (ASX: CXO) shares? The evidence appears to suggest they are.

Trading of the lithium stock has increased significantly over the last 12 months. In fact, it's been crowned trading platform Superhero's most popular ASX share of 2022.

No doubt, the company's rising popularity has helped send its stock rocketing higher this year.

At one point, the Core Lithium share price was up nearly 200% year to date, reaching an all-time high of $1.875. It has since fallen to trade at $1.157 today – 83% higher than it was at the start of 2022.

For comparison, the S&P/ASX 200 Index (ASX: XJO) – which Core Lithium was only admitted to in June – has fallen 5% so far this year.

So, why are Aussie investors seemingly obsessed with the ASX 200 lithium share? Let's take a look.

A smiling woman holds an arm in the air in triumph while also holding a graphic of a fully-charged battery in her other hand.

Image source: Getty Images

Why are Core Lithium shares so popular with ASX 200 investors?

An obvious factor likely behind Core Lithium's recent popularity is its work in the lithium space.

Superhero founder and CEO John Winters told The Motley Fool Australia:

Lithium stocks on Superhero were consistently popular throughout the year. I think it's a trend we started seeing towards the end of 2021, but it really came into full force this year.

With Australia one of the world's biggest lithium producers as well as an increased focus on renewable energy and electric vehicles, it's no surprise that [many of the] most traded Australian companies on Superhero this year mine lithium.

And soaring lithium prices likely didn't hurt the stock's popularity.

Pilbara Minerals Ltd (ASX: PLS)'s most recent lithium auction heralded a bid which, on a pro-rata basis for lithia content and including freight costs, equated to around US$8,575 per dry metric tonne.

Finally, with the Australian government tipping lithium prices to continue growing in 2023 – driven by demand for electric vehicles – it's no surprise many market participants are excited by the company's future earnings.

On the cusp of production

Speaking of earnings, Core Lithium hasn't got any. But that hasn't discouraged investors.

In fact, another factor potentially driving ASX 200 fans to Core Lithium shares may well be the company's position as a developer on the cusp of production.

It's one of few companies that found themselves within a hair of their maiden production when the latest lithium boom hit the market.

The company's Finniss Lithium mine was officially opened in October, with first production expected to be shipped in early 2023.

Thus, market watchers might have seen the potential for major growth in the lithium stock.

And let's not forget its short-lived non-binding offtake agreement with Tesla.

The New York-listed electric vehicle giant also garnered plenty of attention in 2022, coming in as Superhero's most traded US stock.

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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