ASX lithium shares had a very different year in FY23 compared to FY22, largely due to rapidly descending lithium commodity prices amid a rapidly rising supply of the 'white gold' in the second half.
Another major catalyst for the price fall was China ending its subsidies for electric vehicles (EVs), which led to a decline in demand.
According to dailymetalprice.com, the per-kilogram price for lithium was in the $80s in December before plunging into the mid-$20s in May. It has been steadily rising since and is now in the $40 range.
Meantime, the impact of falling commodity prices on ASX lithium shares was somewhat offset by positive sentiment relating to mergers and acquisitions (M&A) activity in the second half of FY23.
Let's take a look at which ASX lithium shares in the ASX 200 recorded the highest share price growth in FY23. The following data is courtesy of S & P Global Market Intelligence.
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The hottest ASX lithium shares of FY23
Liontown Resources Ltd (ASX: LTR)
The Liontown share price was the best performer among ASX 200 lithium shares in FY23, with a smashing 168% gain. It took just a single piece of news to turbocharge the junior miner's stock last financial year. That was the $2.50 per share takeover offer from US lithium giant Albemarle in March. Liontown rejected the offer, and the stock hasn't traded below this level since. Liontown shares are changing hands for $2.76 today. My colleague James discusses whether Liontown shares are looking at another strong year in FY24.
Pilbara Minerals Ltd (ASX: PLS)
The Pilbara Minerals share price rose by 113.5% in FY23, partly due to strong profits, which allowed the company to pay a maiden dividend in March. Top broker Macquarie sees more growth ahead. It has an outperform rating on the stock and a 12-month share price target of $7.30. As my Fool colleague Tristan points out, Pilbara Minerals has a best-in-breed balance sheet with US$2.68 million in cash.
Allkem Ltd (ASX: AKE)
The Allkem share price rose by 55% in FY23. The big news for Allkem in FY23 was the $15.7 billion merger announcement with US lithium behemoth Livent Corp in May. The deal is expected to close at the end of 2023, subject to approvals. The transaction implied about a 14% premium on the Allkem share price at the time of the announcement. Allkem shareholders will contribute their shares to the merged entity at an implied price of $13.54 per share. Allkem shares are trading for $16.23 today.
IGO Ltd (ASX: IGO)
Lithium and nickel producer IGO saw 53% growth in its share price in FY23. It was the first full year of operations for IGO's battery-grade lithium hydroxide plant in Western Australia, which is co-owned with joint venture (JV) partner Tianqi Lithium Corp. The plant is the first of its kind in Australia and the largest plant outside China. The JV also owns a 51% stake in the Greenbushes Lithium Mine with Albermarle. IGO delivered a record quarterly profit in March, driven by a 30% increase in its share of net profit from the hydroxide plant. The FY23 year was marred by the sudden death of CEO and managing director Peter Bradford in October 2022. He was succeeded by 20-year Rio Tinto Ltd (ASX: RIO) executive Ivan Vella last month.
Mineral Resources Ltd (ASX: MIN)
Mineral Resources is a diversified miner operating iron ore, gas, mining services, and lithium divisions. The Mineral Resources share price rose by 48% in FY23. Lithium is providing a growing share of the company's revenue pie. In its half-year results, Mineral Resources reported a 74% increase in total revenue to $2,350 million, driven by a huge increase in lithium revenue from $143 million in 1H FY22 to $997.2 million in 1H FY23. The miner owns a stake in two of Australia's largest hard-rock lithium mines. Mt Marion is owned 50:50 with Ganfeng and Wodgina is owned 40:60 with Albemarle.
