Why are ASX lithium shares like Pilbara Minerals going gangbusters today?

Lithium is the place to be on Wednesday it seems.

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The Australian share market is having a stellar day on Wednesday.

And while most sides of the market are rising, one area is certainly catching the eye – the lithium industry.

At present, a number of ASX lithium shares are generating strong gains for their shareholders.

Here's a summary of the movers and shakers:

  • The Allkem Ltd (ASX: AKE) share price is up 6% to $9.16
  • The Core Lithium Ltd (ASX: CXO) share price is up 1.5% to 38 cents
  • The James Bay Minerals Ltd (ASX: JBY) share price is up 10% to 37 cents
  • The Liontown Resources Ltd (ASX: LTR) share price is up 2.5% to $1.54
  • The Mineral Resources Ltd (ASX: MIN) share price is up 6% to $63.33
  • The Pilbara Minerals Ltd (ASX: PLS) share price is up 6% to $3.73

Why are ASX lithium shares rocketing?

While some ASX lithium shares are rising following the release of news, the general driver of these gains has been a strong gain by their peers on Wall Street overnight.

For example, Albemarle Corporation (NYSE: ALB) jumped 10% and Livent Corp (NYSE: LTHM) was up 9% in New York.

Investors were flooding back into the beaten-down lithium industry after US inflation cooled, sparking hopes that interest rate rises are now over. This could be seen as good news for the electric vehicle market, which requires lithium for batteries, as higher rates have an impact on consumer spending.

What about news?

There is also some company-specific news in the industry today, such as Allkem receiving FIRB approval for its proposed merger with Livent Corp.

In addition, James Bay Minerals revealed elevated lithium readings from the portable LIBS analyser obtained from the Hawker and Gauntlet pegmatites. This is located within the company's Aero Property.

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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