The Core Lithium Ltd (ASX: CXO) share price is 4.6% lower to 38 cents, with the junior ASX lithium share the biggest faller of the S&P/ASX 200 Index (ASX: XJO) on Thursday.
It's been a poor day of trading for ASX lithium shares today.
The ASX 200 is up 0.6%, however, weaker lithium prices are likely leading the ASX lithium shares on a downward trajectory.
The lithium carbonate price sank to a two-year low of US$23,122 per tonne overnight.
Let's review.
Core Lithium share price the biggest faller of the ASX 200
The Core Lithium share price is in good company today, with many other ASX lithium shares down.
Among the junior ASX lithium shares, the fallers include Galan Lithium Ltd (ASX: GLN) shares down 4.1%, Latin Resources Ltd (ASX: LRS) shares down 3.8%, Global Lithium Resources Ltd (ASX: GL1) shares down 3.5%, Sayona Mining Ltd (ASX: SYA) shares down 2.15%, Delta Lithium Ltd (ASX: DLI) shares down 1.4%, and Liontown Resources Ltd (ASX: LTR) shares down 0.34%.
Among the larger ASX lithium shares, Allkem Ltd (ASX: AKE) shares are up 1.4%, Pilbara Minerals Ltd (ASX: PLS) shares are down 2.1%, and Mineral Resources Ltd (ASX: MIN) shares are down 2.1%.
In addition, IGO Ltd (ASX: IGO) shares fell 4% to a 52-week low of $11.56 in earlier trading.
A note out of Citi this week predicts that lithium prices may continue to fall by up to 20%.
In The Australian today, JP Morgan downgraded the entire lithium sector after reviewing its outlook for lithium prices.
The broker cut Core Lithium shares and IGO shares to underweight and cut Pilbara Minerals shares to neutral.
Citi kept its overweight rating on Allkem shares and Leo Lithium shares because of valuation support.
JP Morgan analyst Lyndon Fagan said:
Our earnings have been crunched from our more conservative price deck.
It is hard to build conviction on a near-term sector recovery, and therefore we rank the lithium space behind base & bulk commodities on a relative view.
Think long term on ASX lithium shares
However, long-term investors need to remember that brokers' views are often much more short-term, with their share price targets only relevant for the next 12-month period.
Also, the trends supporting ASX lithium shares, like global decarbonisation and the rising popularity of electric vehicles, are very likely here to stay — for decades.
Macquarie is recommending no less than 16 ASX lithium shares for long-term investment today.
The broker says current share price weakness as a result of lithium prices falling from their extraordinary record highs of late 2022 has provided great buy-in opportunities for long-term investment in the sector.
It's also worth noting that the bosses of Australian mining are showing increasing interest and urgency in acquiring lithium exposure, demonstrating the importance of lithium in Australia's mining scene.
As we've reported, Australian mining doyen Gina Rinehart is raising her stake in Liontown at a rapid pace.
Also, Mineral Resources recently became Delta Lithium's biggest shareholder with a 17.44% stake, earning MinRes chief Chris Ellison and one of the lieutenants seats on the Delta board.
Should you buy Core Lithium shares?
The brokers have mixed views on Core Lithium shares.
On the Westpac trading platform, there are 10 analysts covering the Core Lithium share price. Three say it's a strong buy, two say it's a hold, three say it's a moderate sell, and two say it's a strong sell.
Macquarie is recommending that investors buy Core Lithium following a share price fall of about 60% in 2023. It has an outperform rating on Core Lithium and a 12-month share price target of 65 cents.
However, Core Lithium remains one of the top 10 most shorted stocks on the market today. The short interest is 8.6% and up strongly week on week, as my colleague James reported on Monday.
Core Lithium had big news for the market last week when it reported a surprise maiden profit.
The Core Lithium share price screamed 22% higher on the news.
