Core Lithium shares crashed 22% in November, now December is shaping up to be a shocker too!

Core Lithium shares have faced stiff headwinds from several fronts over the past weeks.

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Core Lithium Ltd (ASX: CXO) shares just finished off a November to forget only to see more steep selling in December.

Shares in the S&P/ASX 200 Index (ASX: XJO) lithium stock closed yesterday trading for 25.5 cents. As we head into the lunch hour on Tuesday shares are swapping hands for 23.5 cents apiece, down 7.8%.

This sees the lithium producer's stock down 16% so far in December, after crashing 22.2% in November.

Unless there's a big afternoon turnaround, this will mark the seventh consecutive trading day of losses for Core Lithium shares.

Why the renewed selling pressure?

Core Lithium shares are joining the broader sell-off across most all lithium stocks today. That looks to be driven by fears that many of the Aussie miners might not gain access to the billions of dollars on offer via the United States Inflation Reduction Act (IRA).

The IRA cash is potentially available to Aussie miners of minerals deemed critical to the world's energy transition. But over the weekend the US Department of Energy drafted rules that would exclude companies where China, Iran, Russia or North Korea hold more than a 25% interest.

What happened with Core Lithium shares in November?

Core Lithium shares closed out October trading for 36 cents apiece. When the closing bell rang on 30 November, shares were swapping hands for 28 cents, down 22.2%.

The stiffest headwind battering the company in November was the continuing decline in global lithium prices. Lithium carbonate prices dropped more than 30% over the month. And many analysts, including those at Goldman Sachs, forecast further price declines into 2024.

In early November, Goldman also warned that Core Lithium shares could be more susceptible to falling prices for the battery-critical metal, saying it could widen the discount of its low-grade lithium.

And later on in the month, Goldman's analysts warned that the combination of inflationary cost pressures and falling lithium prices could see Core Lithium launch another capital raising. Capital raisings tend to dilute the value of shares already issued.

With the latest round of selling, the Core Lithium share price is now down a painful 82% over the past 12 months.

Long-term investors who bought shares five years ago will still be sitting on gains of 292%.

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group. 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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