Sayona share price dives 6% cracking a fresh 52-week low

This lithium share is having another disappointing session.

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The Sayona Mining Ltd (ASX: SYA) share price has continued its disappointing run on Friday.

This has seen the lithium developer's shares drop over 6% to a fresh 52-week low of 14 cents.

This latest decline means that the Sayona share price has now lost more than half of its value over the last six months.

What's going on with the Sayona share price?

Investors have been selling down the company's shares today amid broad weakness in the lithium industry.

This has led to most ASX lithium shares tumbling into the red on Friday. For example, here is the state of play after lunch:

  • The Allkem Ltd (ASX: AKE) share price is down 1%
  • The Core Lithium Ltd (ASX: CXO) share price has dropped 3%
  • The Liontown Resources Ltd (ASX: LTR) share price is down 2%
  • The Mineral Resources Ltd (ASX: MIN) share price is down 2%
  • The Pilbara Minerals Ltd (ASX: PLS) share price has fallen 2.5%

Why are lithium shares falling?

Today's selling appears to be in response to a number of lithium shares on Wall Street falling overnight. But what caused that, remains unclear.

However, it is worth noting that Pilbara Minerals' update earlier this week raised a few eyebrows.

Although the company had an exceptionally strong quarter operationally, the same could not be said for the price it commanded for its lithium.

Pilbara Minerals reported a 33% quarter on quarter decline in its average realised spodumene price to US$3,256 per tonne. This led to quarterly revenue falling 18% to approximately A$800 million.

Investors may be concerned that lithium shares like Sayona Mining are about to start producing lithium when prices are on the slide. This would have obvious consequences for the company's future earnings potential and ultimately its valuation.

Time will tell if this latest decline proves to be a buying opportunity for investors.

Motley Fool contributor James Mickleboro has positions in Allkem. 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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