Home / Sector / Materials Shares / Why are ASX 200 lithium shares tumbling today?

Why are ASX 200 lithium shares tumbling today?

Lithium shares are trading lower today, largely wiping out yesterday's gains.

Posted by
Monica O'Shea
Monica is a journalist with experience working for Daily Mail Australia in Sydney and the Port Pirie Recorder and the Flinders News in South Australia. Monica completed a journalism cadetship in 2013. She also hold a B.Science (Biotechnology) with Honours from the University of Adelaide. Monica has worked in government at the local, state and federal level. Monica has a keen interest in finance and the share market and enjoys exploring the highs and lows. When not writing for Motley Fool Australia, Monica enjoys travel, sport, music, and likes to play the violin in her spare time.
Published
| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points
  • Many ASX lithium shares are sliding on the market today
  • Global lithium giants, including Livent and Albemarle, also dropped on US markets overnight
  • Today's falls wipe out gains many lithium shares enjoyed yesterday 

The S&P/ASX 200 Index (ASX: XJO) is currently up 0.28%, but ASX 200 lithium shares are missing the party.

Lithium shares in the red today include:

  • Core Lithium Ltd (ASX: CXO) shares are down 2.66%
  • Pilbara Minerals Ltd (ASX: PLS) shares are sliding 3.69%
  • Allkem Ltd (ASX: AKE) shares are falling 2.83%
  • Mineral Resources Ltd (ASX: MIN) shares are down 1.81%

So what is going on with ASX 200 lithium shares on Thursday?

A woman sits at a computer with a quizzical look on her face with eyerows raised while looking into a computer, as though she is resigned to some not pleasing news.

Image source: Getty Images

What's going on?

ASX 200 lithium shares are following a similar trend to US lithium shares overnight.

Sociedad Quimica y Minera de Chile (NYSE: SQM) shares slid 1.65%, while the Livent Corp (NYSE: LITHM) share price fell 3.7%. Shares in Albermarle Corporation (NYSE: ALB) dropped 0.9%.

In news overnight, Chile and the European Union are set to sign a MOU [memorandum of understanding] to develop value-added lithium projects in Chile, Reuters reported.

Speaking at a joint press conference with Chile president Gabriel Boric, European Commission president Ursula von der Leyen said:

We're working to sign an MOU soon. This strategic association will allow us to create local added value here in Chile.

Multiple US and Australian lithium shares have projects in Chile, so this extra competition from Europe could be influencing lithium supply sentiment.

ASX 200 lithium shares are also shedding gains they made yesterday after the market responded positively to US inflation data.

Looking ahead, the team at Goldman Sachs has a sell rating on Core Lithium with a 75-cent price target. Morgans has given Core Lithium a hold rating and a $1.05 price target.

Meanwhile, Mineral Resources could be a buy, the team at Morgans believes. Analysts have placed an add rating on the share with a $93 price target.

The broker is optimistic about Mineral Resources' "diversification" which could help it tolerate volatility in lithium markets. Morgans said:

We see MIN's lithium/iron ore market exposures as an ideal combination to benefit from the China re-opening increase in demand during 1H CY23. 

Share price snapshot

Pilbara Minerals shares have surged 129% in a year, while Core Lithium shares have shed 12%.

Allkem shares are up 55% in the past 12 months, while the Mineral Resources share price has risen 31%.

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.

More on Materials Shares

Scared, wide-eyed man in pink t-shirt with hands covering mouth.
Materials Shares

Down 6% today: What's going on with the James Hardie share price?

| Samantha Menzies

Can the shares keep tumbling?

Read more »

A mature age woman with a groovy short haircut and glasses, sits at her computer, pen in hand thinking about information she is seeing on the screen.
Materials Shares

IperionX validates GenX™ titanium production: Major efficiency gains

| Laura Stewart

IperionX has validated its GenX™ platform, delivering major improvements in titanium production efficiency and paving the way for industrial-scale development.

Read more »

Buy, hold, and sell ratings written on signs on a wooden pole.
Broker Notes

PLS shares have soared 107% in a year! Is the ASX 200 lithium stock now a buy, hold or sell?

| Bernd Struben

A top analyst provides his outlook for the rocketing PLS share price.

Read more »

Couple on their laptop in their home kitchen.
Technology Shares

$10,000 invested in DroneShield and Core Lithium shares 3 years ago is now worth…

| Bernd Struben

Was I better off buying $10,000 worth of DroneShield shares or Core Lithium shares in September 2023?

Read more »

Two miners at a mine site on their tablets, with mining machinery behind them.
Resources Shares

$10,00 invested in Rio Tinto and Fortescue shares 3 years ago is now worth…

| Bernd Struben

Here’s how the three-returns from a $10,000 investment in Rio Tinto and Fortescue shares compare.

Read more »

Two people wearing hard hats talking with each other at a mine site, with two workers in the background.
Materials Shares

Iron ore is back below US$100. Are BHP and Rio Tinto shares still buys?

| Mark Verhoeven

Copper is carrying BHP now, not iron ore.

Read more »

A man wearing a suit holds his arms aloft, attached to a large lithium battery with green charging symbols on it.
Materials Shares

Core Lithium shares jump 8% after a milestone investors have waited months for

| Aaron Teboneras

The comeback continues after a huge year for the stock.

Read more »

Woman and man worker in quarry on excavation machine looking at a clipboard.
Materials Shares

Why this news from China has changed the outlook for BHP shares

| Mark Verhoeven

A customer wants to become a part-owner.

Read more »