ASX lithium share Core Lithium Ltd (ASX: CXO) is 22 cents apiece on Tuesday, down 3.5%.
Lithium stocks have recently stormed higher on the back of rising commodity prices.
Analysts at Trading Economics said the lithium carbonate price closed at a 17-month high of US$13,348 per tonne overnight.
The Spodumene Concentrate Index (CIF China) Price closed at US$1,184 per tonne, up about 26% over the past month.
The battery-grade lithium hydroxide price finished at US$10,301 per tonne, up 9% over the month.
Analysts said rising global demand for batteries and power infrastructure is pushing commodity prices higher.
In their latest update, the analysts said:
Top lithium consumer China stated it would double EV charging capacity to 180 gigawatts by 2027signaled, supporting lithium-rich energy storage systems with compensation mechanisms for power storage infrastructure.
Also, output of new energy vehicles in China rose by 33.1% in the first ten months of the year, with October sales reflecting 51.6% of the market share, the first majority for new energy vehicles on record.
Consequently, major producer Ganfeng signaled they expect lithium demand to grow by 30% next year.
On the supply front, CATL's Jiangxi mine will reopen after the Chinese Government approved its restart following a suspension.
Jiangxi provides 3% of the world's lithium supply.
The analysts added:
… markets continued to assess the magnitude of intervention that Beijing will enforce due to its anti-involution initiative.
China's anti-involution strategy seeks to avoid excess capacity and destructive price competition.
This all bodes well for the value of ASX lithium shares.
$5,000 in Core Lithium shares a month ago
Core Lithium shares closed at 12.75 cents apiece on 3 November.
If you had put $5,000 into Core Lithium, then it would have bought you 39,215 shares.
That would have been a good buy given the ASX lithium share ripped to a 52-week high of 26.5 cents on 20 November.
The stock has retraced a bit since then to be 22 cents at the time of writing.
That means your $5,000 shareholding is now worth $8,627.30.
What's the latest news from Core Lithium?
Core Lithium held its annual general meeting on 14 November.
Chair Greg English said:
… there have been some recent signs of improvement in sentiment towards lithium which we would like to see continue.
Core Lithium also released a revised restart plan and ore reserve estimate for Grants at its flagship Finniss Project last month.
Finniss was put into care and maintenance in early 2024 due to weak lithium prices.
English said:
Delivery of the Restart Study outcomes will make Finniss more insulated from the lithium price cycle.
Core Lithium said restarting Finniss will rely on new financial partnerships, which the company is working on now.
The miner says it would be able to produce first ore at Finniss within one month of reopening under the restart plan.
Core Lithium raised its ore reserve estimate for Grants by 33% to 1.53Mt at 1.42% Li2O.
Should you buy this ASX lithium share?
Last week, Goldman Sachs reiterated its hold rating on Core Lithium shares.
The broker expects the ASX lithium share to retreat. Its 12-month price target range is 7 to 14 cents per share.
At the same time, Ord Minnett upgraded its rating on the ASX lithium share to buy with a price target of 23 cents.
