It has been a much better day for ASX lithium shares on Friday.
In morning trade, shares such as Allkem Ltd (ASX: AKE), Core Lithium Ltd (ASX: CXO), Liontown Resources Ltd (ASX: LTR), and Pilbara Minerals Ltd (ASX: PLS) are all pushing higher despite the market dropping for a third day in a row.
While this is positive, it doesn't hide the fact that all four ASX lithium shares are down materially in recent weeks.
For example, here's the state of play since this time last month:
- Allkem shares are down 19%
- Core Lithium shares are down 53% (also raised capital)
- Liontown shares are down 9%
- Pilbara Minerals shares are down 8.5%
What's going on with ASX lithium shares?
Investors have been selling battery materials shares due to another sudden decline in lithium prices.
Commenting on the state of the Chinese lithium market, an unnamed producer told Fastmarkets:
There were barely any spot trades over the past week, and the spot prices are still falling. The downtrend could persist into the near future.
Another producer spoke bleakly about current trading conditions. It said:
The consumers are cautious and staying on the sidelines. They believe spot lithium prices in China haven't reached a bottom yet.
A third producer also revealed that there is no demand for lithium hydroxide on the spot market. It explains:
Lithium producers are not offering hydroxide since there's no demand for spot units. They are only delivering on long-term orders. But some traders are offering hydroxide though, in an attempt to offload them before prices decline further.
Unfortunately, this weakness isn't just being seen in China. Fastmarkets reports that multiple market participants have highlighted that several South Korean battery producers have been trying to sell surplus lithium back to the spot market.
All in all, this points to a tough period for ASX lithium shares.
