The Core Lithium Ltd (ASX: CXO) share price is charging higher today, up 5.11% in afternoon trading to 97 cents per share.
This comes after shares in the S&P/ASX 200 Index (ASX: XJO) lithium stock dropped 4.2% yesterday, closing at 92 cents per share.
So, what's driving the rebound?
What are ASX 200 investors considering?
It's not just the Core Lithium share price that's widely outperforming the 0.3% loss posted by the ASX 200 so far today.
In fact, all of the ASX 200 lithium shares are well into the green.
Here's how they're tracking at the time of writing:
- Allkem Ltd (ASX: AKE) shares are up 2.26%
- Pilbara Minerals Ltd (ASX: PLS) shares are up 4.64%
- IGO Ltd (ASX: IGO) shares are up 2.59%
- Mineral Resources Ltd (ASX: MIN) shares are up 4.16%
With no price-sensitive news out today, the Core Lithium share price looks to be benefiting from a broader investor rethink about the outlook for lithium prices.
The battery-critical metal hit all-time highs in November but has fallen some 30% since then amid speculations of supply and demand imbalances.
Several prominent analysts, including those at Goldman Sachs, have been forecasting a looming supply and demand imbalance in 2023, which would drive the lithium price even lower. This has seen some investors lighten their holdings of ASX lithium stocks.
However, the quarterly results released last week by US lithium giant Albemarle Corporation (NYSE: ALB) suggest demand for lithium may prove more resilient than these bearish forecasts suggest. And that could usher in more tailwinds for the Core Lithium share price in the months ahead.
Albemarle posted a whopping 444% increase in its adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA), which came in at US$1.2 billion.
Net sales of US$2.6 billion were up 193%, buoyed by a 410% increase in lithium net sales of US$2.1 billion. Albemarle reported it received 328% higher pricing net of FX for lithium during the quarter, partly driven by increased market pricing.
For its full-year 2023 guidance, the company expects net sales to increase between 55% to 75% "primarily driven by market demand and continued favourable pricing for lithium".
Albemarle also has a bullish outlook for EV production in China, the world's top EV manufacturer. It expects China to produce approximately 2.5 million more EVs in 2023 than the nation did in 2022.
The company noted, "Chinese EV sales typically rebound following subsidy reductions and COVID lockdowns."
With some 75% of the world's consumption of lithium currently going into rechargeable batteries, that equates to some healthy demand growth. And it could indicate some more big days ahead for the Core Lithium share price.
Core Lithium share price snapshot
With today's intraday gains factored in, the Core Lithium share price is up 22% over the past 12 months.
