After posting strong growth for much of the past full year, ASX lithium shares have come under selling pressure in recent months.
Over the last year, the All Ordinaries Index (ASX: XAO) has slipped 2.1%, with the All Ords having dropped 4% in the past month.
Here's how the performance from these top ASX lithium shares compares:
- Liontown Resources Ltd (ASX: LTR) are up 12.2% in a year and down 22.3% in a month.
- Pls Group Ltd (ASX: PLS) shares – formerly Pilbara Minerals – are up 85.2% in a year and down 17.9% in a month.
- IGO Ltd (ASX: IGO) shares are up 40.7% in a year and down 17.4% in a month.
- Core Lithium Ltd (ASX: CXO) shares are up 224.6% in a year and down 6.1% in a month.
- Mineral Resources Ltd (ASX: MIN) shares are up 41.7% in a year and down 19.0% in a month.
The common headwind battering all of the miners over the last month is the sharp retrace in global lithium prices.
While the lithium carbonate price remains up 79% since this time last year, it's fallen 34% from its mid-May multi-year highs. And that fall accelerated in recent weeks, with the lithium price slumping 17% since 1 September.
A lot of that decline has come after global and Australian miners ramped up their production amid higher lithium prices, which looks to have quickly led to an oversupply situation.
But ASX lithium shares, and their stockholders, could have more to worry about than just an oversupply of lithium.
Indeed, investors would do well to keep one eye on sodium, an element widely available across the globe.
Image source: Getty Images
Will sodium batteries put more pressure on ASX lithium shares?
Lithium batteries aren't the only way to store large amounts of energy.
Indeed, in potentially concerning news for ASX lithium shares, Chinese battery manufacturing giant CATL expects that sodium-based batteries could take a big slice of market share from lithium batteries.
Addressing the Australian Financial Review Asia Summit, CATL Australia chairman John Kwon said sodium-ion battery costs will likely be on par with lithium-ion batteries early in 2027.
While Kwon said lithium batteries would remain a superior choice for EVs, sodium batteries could be better for data centre power storage. He noted that sodium batteries aren't as sensitive to temperature as lithium batteries. And they can be recharged more often.
"Sodium-ion is now moving from development towards commercial deployment," Kwon said (quoted by the AFR).
He added:
Sodium-ion is an important development because it creates another pathway for scaling battery deployment using widely available raw materials and adding flexibility to global supply chains.
And ASX lithium shares could be facing that fresh competition soon, with Kwon forecasting that sodium batteries should be commercially available in Australia by mid-2027.
