It's been a very happy Wednesday indeed for the S&P/ASX 200 Index (ASX: XJO) and most ASX 200 shares. But sadly, not for the Allkem Ltd (ASX: AKE) share price.
The ASX 200 is currently up by a pleasing 0.49% and is back over 6,800 points. But in stark contrast, we've seen some heavy selling pressure on the Allkem share price. In fact, this ASX 200 lithium stock has just hit a new 52-week low.
Yep, Allkem shares closed at $9.54 each yesterday, but opened at $9.44 this morning before falling as low as $9.28 – the company's new 52-week low. At the time of writing, Allkem has slightly recovered, but remains down a chunky 1.99% at $9.35 a share.
So what's going so wrong for Allkem today that has prompted this new 52-week low?
Why did the Allkem share price just hit a new 52-week low?
Well, the first thing to note is that Allkem is not alone in its market-defying falls today. In fact, most ASX lithium shares are suffering similar fates. Take lithium leader Pilbara Minerals Ltd (ASX: PLS). Pilbara shares are presently down a painful 0.82% at $3.64 each. Core Lithium Ltd (ASX: CXO) has lost 1.4% to 36 cents a share, while Liontown Resources Ltd (ASX: LTR) has dropped 1.12% to $1.59 a share.
The entire lithium sector has been under pressure for a few weeks now, thanks largely to a number of disappointing quarterly updates that indicate a falling lithium price.
On 26 October, Pilbara reported an 11% fall in quarterly lithium production for the three months to 30 September, as well as a 31% quarter-on-quarter fall in the average lithium price released for its products.
On that same day, Allkem itself also reported its own quarterly update. While Allkem, unlike Pilbara, was able to increase production by 25%, it also reported drastically lower lithium sales prices.
This seems to be the fundamental reason behind the Allkem share price's new 52-week low today. Since this update was released on 26 October, the Allkem share price has fallen lower every single trading day, bar one. Between 26 October and the present, the company has shed almost 7.5%.
No doubt investors will be hoping that Allkem shares bounce off today's new 52-week low and recover from here. But we'll have to wait and see what happens.
After today's falls, the Allkem share price is now down 15.5% year to date in 2023 so far, and down 38% over the past 12 months.
