S&P/ASX 200 Index (ASX: XJO) lithium stocks put in a mixed performance this week.
Here's how Australia's top five lithium shares have performed since the closing bell rang last Friday:
- Pilbara Minerals Ltd (ASX: PLS) shares are down 9.7%
- Core Lithium Ltd (ASX: CXO) shares are down 1.0%
- Allkem Ltd (ASX: AKE) shares are up 2.6%
- IGO Ltd (ASX: IGO) shares are up 3.2%
- Mineral Resources Ltd (ASX: MIN) shares are up 6.8%
So, what's been impacting ASX 200 lithium stocks this week?
ASX 200 lithium stocks eye China production curbs
Some surprising news came out of China this week, with lithium ore-processing operations in Yichun, Jiangxi province ordered to halt operations.
This came as Chinese officials launched an investigation into the lithium miners in the province over potential environmental violations. With Yichun producing roughly 10% of the annual global lithium supply, investors in ASX 200 lithium stocks were keeping an eye on the developments.
It remains unclear how long the operations will remain offline.
This week also saw Goldman Sachs come out with a new, decidedly bearish forecast for lithium prices. The broker cited the risk of "higher than expected lithium supply" in China, coupled with ASX 200 lithium stocks "recently outperforming production expectations [and] increasing near term production guidance".
What helped lift the Mineral Resources and Allkem share prices?
Both Allkem and Mineral Resources are in the green over the week, potentially bolstered by some positive broker coverage.
Analysts at Bell Potter released bullish coverage on Mineral Resources, with a buy rating on the stock and a $110 price target. That's 21% above the Mineral Resources current share price.
Bell Potter noted that the ASX 200 lithium stock reported a higher profit for the six months ending 31 December than it generated in the entire 12-month period preceding that. And its analysts expect more strong growth ahead.
Meanwhile, Allkem was tipped as a buy this week by Goldman Sachs, despite the broker's rather dire outlook for lithium prices.
Goldman has a $15.40 12-month price target on Allkem shares, 26% above the current share price. "Allkem has one of the best production outlooks in our lithium coverage," the broker noted.
Why did the Pilbara Minerals share price underperform this week?
While not accounting for all of this week's underperformance, much of Pilbara Minerals' sell-off this week was due to its shares trading ex-dividend yesterday.
A week ago Friday, Pilbara Minerals reported on its half-year results.
On the back of a stellar 989% year on year increase in statutory net profit after tax (NPAT), the ASX 200 lithium stock rewarded investors with its first-ever dividend of 11 cents per share, fully franked.
It's pretty standard for stocks to lose as much, or slightly more, than their dividend payouts on the day they trade without those rights. And Pilbara Minerals proved no exception.
