Core Lithium Ltd (ASX: CXO) shares have been on a rollercoaster lately, jumping 11% in just the past week.
They finished the session on Tuesday at 9.4 cents, down 4% on the day.
Lithium stocks have been weak across the board this year as the price of the underlying battery metal slumps to multi-year lows amid oversupply and weak demand.
Core Lithium shares have endured a similar fate to this point. But what's next for this ASX lithium player?
What's behind Core Lithium shares?
Core Lithium shares have been through a turbulent period, largely driven by the volatile lithium market.
The battery metal took a steep dive after its peak in 2021, plummeting by about 85% since then. This downturn has affected the entire lithium sector, but some have been hit harder.
Such is the downturn that shares in Core Lithium have slipped more than 62% this year to date.
So, why the recent uptick?
The company announced two strategic investments in September that have piqued investor interest.
First, it has entered into agreements with Lithium Australia Ltd (ASX: LIT), acquiring a 9.8% stake in Charger Metals NL (ASX: CHR).
It also advised last week it has secured a 30% interest in the Bynoe Project, surrounded by its Finniss Project in the Northern Territory.
Investors have bought the news, sending the stock into green this past week.
Can it sustain this momentum?
Despite the upsides, analysts remain cautious. Ord Minnett has issued a sell rating on Core Lithium shares with a price target of 9 cents, near where it trades at the time of writing.
Goldman Sachs is a tad less optimistic, rating the stock a hold but setting a target of 8 cents.
For Core Lithium shares to rebound, two significant catalysts would likely need to occur: a large jump in production, and/or a recovery in lithium prices.
To the first point, the company's latest quarterly update provided a glimmer of hope. It reported record shipments of more than 33,000 dry metric tonnes (dmt) of spodumene concentrate at an average price of US$1,078/dmt.
However, the production side wasn't as rosy, with a decline of 18% due to depleted stockpiles.
Citi's recent prediction of a 20% to 25% rise in lithium prices over the next few months is also noteworthy. If this materialises, it could impact Core Lithium shares.
In the absence of this, Core Lithium has also made some moves into uranium exploration at its Napperby project in the Northern Territory.
Time will tell if this move will pay off or not. But CEO Paul Brown said it could be an "increasingly important" component of changing energy policy.
Foolish takeaway
Core Lithium shares have had a rough ride in 2024. But recent developments and strategic moves offer some optimism.
The shares are down 76% in the past 12 months.
