Why are ASX 200 lithium shares having such a top run today?

ASX lithium shares are powerhouses in the market today.

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Key points

  • ASX 200 lithium shares are following their US counterparts and charging ahead today
  • Pilbara Minerals, Core Lithium and Allkem are all in the green
  • The price of battery-grade lithium is up 8% amid other positive signs for the industry in the US

ASX 200 lithium shares are having a smashing run on the market today.

Lithium explorers and producers on the rise include:

  • Pilbara Minerals Ltd (ASX: PLS), with shares up 3.48% to $4.91
  • Allkem Ltd (ASX: AKE), jumping 4.23% to $16.00
  • Core Lithium Ltd (ASX: CXO), 1.46% higher at $1.04

So what is going on with lithium shares trading on the ASX today?

What's going on?

ASX 200 lithium shares appear to be following in the footsteps of their counterparts in the United States, while the price of battery-grade lithium soared 8% to US$272,476 per mt on the Shanghai Metals Market.

US lithium giant Albemarle Corporation shares jumped 4.71% overnight, while Lithium Americas Corp shares were up 2.47%. Sociedad Quimica y Minera de Chile shares rose 3.91%.

Market sentiment in the US also appears strong amid new inflation data. The US consumer price index (CPI) rose just 0.1% last month, US Labor Department figures showed. This is driving speculation the US Federal Reserve may leave interest rates on hold tonight.

Commenting on this market sentiment to Reuters, SoFi New York investment strategy head Liz Young said:

If the Fed was looking for data to point to say, 'We're going to pause in June,' I think they got it today

Meanwhile, the US Department of Energy has announced $192 million in funding to recycle batteries from consumer products.

This announcement supports "the Biden-Harris Administration's goal to have EVs make up half of all vehicle sales in America by 2030", the department noted.

Lithium is an essential component in electric vehicle (EV) batteries. More than 3.6 million EVs have been sold in America up to April 2023, according to the department.

Looking at ASX 200 lithium shares, the team at Macquarie has recently placed a $7.70 price target on Pilbara Minerals shares. This implies a nearly 57% boost to the Pilbara share price based on the company's current share price of $4.92.

The broker also has an outperform rating on Core Lithium with a $1.30 price target. However, Citi rates Core Lithium as a sell with a 75-cent price target.

Finally, Bell Potter has a buy rating on Allkem, with a $19.20 price target.

ASX 200 lithium share price snapshot

The Pilbara Minerals share price has exploded 127% higher in the past 12 months, while Core Lithium shares are down 14%.

Allkem shares have soared nearly 56% in the last year.

Motley Fool contributor Monica O'Shea 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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