It's been a bouncy, but still overall positive, day of trading for ASX shares this Monday. At the time of writing, the S&P/ASX 200 Index (ASX: XJO) has gained a shaky 0.01%. But the same can't be said for ASX lithium stocks.
The lithium space on the ASX is having a shocker today.
Just take the share price of the ASX's largest lithium stock, Pilbara Minerals Ltd (ASX: PLS). Pilbara shares have suffered a horrid 5.34% drop so far today. That puts this lithium leader at $4.61 a share.
But it's not just Pilbara on the ropes. Its lithium peer Liontown Resources Ltd (ASX: LTR) has suffered a 3.35% swing into the red.
IGO Ltd (ASX: IGO) is faring no better with its 3.56% decline. Meantime, Allkem Ltd (ASX: AKE) shares are down 5.8%. But no lithium stock is suffering more than Core Lithium Ltd (ASX: CXO) today. Core shares are currently down a nasty 15.23% at 73.75 cents apiece.
So what on earth is going on with lithium stocks this Monday that has seen this corner of the market endure such pain?
Why are lithium stocks being sold off today?
Well, it's not entirely clear. But there are a few smoking guns that could explain why investors are shunning ASX lithium stocks today.
The first, and perhaps most obvious, catalyst for this rejection of lithium is what has happened to Core Lithium shares today. As you may have noticed above, Core Lithium seems to be getting singled out for some especially brutal punishment from investors. This appears to be a consequence of the quarterly update the company released today.
As we covered this morning, Core Lithium reported some healthy, if weather-impacted, spodumene production over the three months ending 30 June 2023. However, investors were not impressed when the company also revealed that it is expecting lithium production in FY2025 to fall below FY2024 levels. That was thanks to processing plant and supply constraints.
This is probably a drag on the entire lithium sector this Monday.
There are a few other factors potentially at play as well. For one, US lithium stocks had a depressing night of trading last Friday night (our time) on Wall Street. Just take one of the most prominent US lithium stocks Albemarle Corporation. Albemarle shares tanked by 3.19% last Friday night.
With this setting the tone for the week, it was probably always going to be a rough day for ASX lithium stocks on the markets today.
But in addition to that, there is another piece of news to discuss that investors might not be appreciating.
China-linked company blocked from lithium takeover
As reported by Reuters late last week, Treasurer Jim Chalmers has prohibited the delisted ASX lithium company Alita Resources Ltd from being acquired by the China-linked Austroid Corporation. There was no explicit reason given for this decision.
However, the federal government has stated in the past that it intends to be "very selective" over who will be allowed to invest in critical mineral operations in Australia going forward.
So this could also be weighing on lithium investors today.
Whatever the reason for today's ASX lithium stock slump, no doubt investors will be hoping sentiment improves over the rest of the trading week.
