These ASX lithium stocks have been named as preferred picks by analysts at Bell Potter this month. Here's what the broker is saying about them:

Arcadium Lithium (ASX: LTM)

Arcadium Lithium is the lithium giant that was formed from the merger of Allkem and Livent Corp last year.

Bell Potter likes the company due to its diverse asset portfolio, robust balance sheet, and strong production growth outlook. It explains:

LTM provides the largest, most diversified exposure to lithium in terms of mode of upstream production, asset locations, downstream processing and customer markets. It is a key large-cap leverage to lithium prices and sentiment, which we expect to improve over the medium term. The group has a strong balance sheet and growth portfolio.

The broker has a buy rating and $10.40 price target on the ASX lithium stock. This implies potential upside of almost 40% for investors.

Mineral Resources Ltd (ASX: MIN)

Another option for investors to look at in the lithium industry is Mineral Resources.

Bell Potter likes the company due to its lithium production growth and diversified income streams. It said:

In contrast to its peers, MIN completes everything from engineering, to construction, to all aspects of operations in-house. Our Buy view is underpinned by MIN's earnings diversification, strong insider ownership, clearly articulated strategies, expertise in contracting and internal growth options at Onslow as well as potential lithium expansions including into downstream. All up, MIN offers diversified exposure to steady income streams from the contracting business and market-driven commodity exposure coupled with earnings derived from both lithium and iron ore.

Its analysts have a buy rating and $75.00 price target on Mineral Resources' shares. This suggests upside potential of almost 13%.

The post 2 of the best ASX lithium stocks to buy this month appeared first on The Motley Fool Australia.

Four ASX shares that are falling more than most today are listed below. Here's why they are dropping:

Arcadium Lithium (ASX: LTM)

The Arcadium Lithium share price is down almost 8% to $10.03. This has been driven by a similarly large decline from Livent Corp (NYSE: LTHM) shares on Wall Street during overnight trade. Arcadium Lithium is the result of the almost complete merger between Allkem Ltd (ASX: AKE) and Livent Corp.

Brainchip Holdings Ltd (ASX: BRN)

The Brainchip share price is down 4.5% to 16.7 cents. Investors have been selling this embattled semiconductor company's shares this week after it announced another capital raising via a new put option agreement. Brainchip is raising $12 million to ensure the lights stay on while it struggles to make any meaningful sales in a market dominated by tech giants.

Megaport Ltd (ASX: MP1)

The Megaport share price is down 2% to $8.82. This appears to have been driven by broad weakness in the tech sector today following another poor session on the tech-focused Nasdaq index. The Nasdaq index ended the session 1.2% lower. This was its fourth consecutive session of declines.

Northern Star Resources Ltd (ASX: NST)

The Northern Star share price is down 2.5% to $12.84. This follows further weakness in the gold sector after another pullback in the gold price overnight. This has led to the S&P/ASX All Ordinaries Gold Index (ASX: XGD) falling a further 1.7% this afternoon.

The post Why Arcadium Lithium, Brainchip, Megaport, and Northern Star shares are dropping appeared first on The Motley Fool Australia.

Over the course of the year, the lithium miner's shares lost approximately 12% of their value.

But considering some of the declines in the industry, this wasn't a bad outcome for investors.

Though, that's not the full story.

It is worth noting that Allkem shares were suspended from trade from 21 December in relation to its merger with Livent Corp (NYSE: LTHM).

The following day, Arcadium Lithium (ASX: LTM) shares commenced trade on the ASX boards on a deferred basis.

They then went on a strong run and ended the year at $11.21, which was just a touch lower than where Allkem shares started 2023.

So, all in all, you could call it a flat year for shareholders, which isn't bad all things considered.

What could be in store for Allkem shares in 2024?

Firstly, Allkem shares are no more, so there's no outlook for them.

But what about Arcadium Lithium shares? Well, they haven't started 2024 in an overly positive fashion.

In fact, following a sharp decline by Livent Corp's shares overnight, Arcadium Lithium shares are down 8% to $10.01 this morning. This stretches their year to date decline to over 9%.

What happens from here is likely to be driven by lithium prices. If prices rebound strongly in 2024, then lithium shares could rally.

However, many analysts are expecting the lithium market to be in surplus for the next two years due to an oversupply of the battery-making ingredient. This could mean that prices are held down for longer, which may not bode well for the industry.

Though, it is worth remembering that a lot can change in a short time in the mining sector. So, there's always a chance for a surprise, but I certainly wouldn't bet big on it happening.

The post What's the outlook for Allkem shares in 2024? appeared first on The Motley Fool Australia.

Will the market be able to bounce back from this on Tuesday? Here are five things to watch:

ASX 200 expected to open flat

The Australian share market looks set for a subdued session on Tuesday following a poor session on Wall Street on Friday. According to the latest SPI futures, the ASX 200 is expected to open the day flat this morning. On Wall Street, the Dow Jones was down 0.05%, the S&P 500 fell 0.3%, and the Nasdaq dropped 0.55%.

Oil prices soften

It could also be a subdued session for ASX 200 energy shares Beach Energy Ltd (ASX: BPT) and Woodside Energy Group Ltd (ASX: WDS) after oil prices softened on Friday night. According to Bloomberg, the WTI crude oil price was down 0.2% to US$71.65 a barrel and the Brent crude oil price is down 0.15% to US$77.04 a barrel. Easing Red Sea concerns weighed on prices.

Lithium shares on watch

Arcadium Lithium (ASX: LTM), Core Lithium Ltd (ASX: CXO), and Pilbara Minerals Ltd (ASX: PLS) shares could come under pressure today after their NYSE-listed peers fell on Friday. The likes of Albemarle and Sociedad Quimica y Minera de Chile dropped around 3% during the session.

Gold price drops

ASX 200 gold shares such as Newmont Corporation (ASX: NEM) and Northern Star Resources Ltd (ASX: NST) could have a soft session on Tuesday after the gold price ended last week in the red. According to CNBC, the spot gold price was down 0.55% to US$2,071.8 an ounce. This couldn't stop the precious metal from ending its two-year losing streak.

Insurers on watch

Insurance giants Insurance Australia Group Ltd (ASX: IAG) and QBE Insurance Group Ltd (ASX: QBE) were given some good news since the market close. Commenting on a note published by Guy Carpenter on the expected outcome of 2024 reinsurance renewals, Goldman said: "We suspect this commentary broadly aligns with expectations in the lead up to renewals for IAG/QBE."

The post 5 things to watch on the ASX 200 on Tuesday appeared first on The Motley Fool Australia.

Four ASX shares that are rising more than most today are listed below. Here's why they are rising:

Arcadium Lithium (ASX: LTM)

The Arcadium Lithium share price is up 6.5% to $10.77. Arcadium Lithium is new on the ASX boards and was formed following the merger of Allkem with Livent Corp. Investors appear to see value on offer here following recent weakness in the lithium industry.

Boart Longyear Group Ltd (ASX: BLY)

The Boart Longyear share price is up 55% to $2.72. This follows news that the drilling services company has entered into a binding arrangement agreement with an affiliate of American Industrial Partners Capital Fund. The agreement will see American Industrial Partners Capital Fund acquire Boart Longyear for US$1.9554 per share, which implies a total equity value of approximately US$371 million.

Opthea Ltd (ASX: OPT)

The Opthea share price is up 24% to 56.5 cents. This morning, this biopharmaceutical company advised that it expects to receive the remaining US$35 million funding from the Development Funding Agreement (DFA) with Carlyle and its life science franchise Abingworth. In addition, it is expecting a further US$50 million financing under an Amended DFA to include a new co-investor. Pleasingly, this financing is non-dilutive to shareholders.

Orecorp Ltd (ASX: ORR)

The Orecorp share price is up almost 13% to 57.5 cents. This has been driven by news that the gold miner has received and accepted a takeover offer from Silvercorp Metals Inc. (TSE: SVM). Silvercorp has offered the equivalent of 58.9 cents per share. This values OreCorp at approximately $276.5 million.

The post Why Arcadium Lithium, Boart Longyear, Opthea, and Orecorp shares are rising today appeared first on The Motley Fool Australia.

In afternoon trade, the lithium miner's shares are up 10% to 35 cents.

This means that Core Lithium's shares are now up almost 30% since this time last week.

What's going on with the Core Lithium share price?

Investors have been buying the company's shares today despite there being no news out of it.

However, it is worth noting that a number of lithium shares are rising today and not just the Core Lithium share price.

This could be due to optimism over COP28 from last week or the high levels of M&A activity in the industry.

In respect to the latter, this week Allkem Ltd (ASX: AKE) shareholders have approved its merger with Livent Corp (NYSE: LTHM), and Azure Minerals Ltd (ASX: AZS) has accepted a joint takeover offer from Gina Rinehart's Hancock Prospecting and Sociedad Química y Minera de Chile S.A. (NYSE: SQM).

It's possible that investors may believe that recent weakness in the industry has made Core Lithium an attractive takeover option and are buying shares today in anticipation of an offer. Particularly given that its shares are still down 65% over the last 12 months despite this recent rebound.

The post Why is the Core Lithium share price jumping 10% today? appeared first on The Motley Fool Australia.

At the time of writing, the lithium miner's shares are up slightly to $10.60.

This means that its shares are now up 16% since this time last week.

However, this strong run will be forced to come to an end on Friday. That's because shareholders have just approved the company's merger with Livent Corp (NYSE: LTHM).

This approval means that before the market open on Friday, Allkem shares will be suspended from the Australian share market and replaced with the CHESS Depositary Interests (CDIs) of the merged entity.

This will see Arcadium Lithium plc CDIs (ASX: LTM) land on the ASX boards during Friday's session.

Allkem shares higher on shareholder vote

While not all shareholders were pleased with the terms of the merger with Livent Corp, that couldn't stop the deal from being approved at yesterday's scheme meeting.

According to the release, 89.27% of the total number of votes cast by Allkem shareholders were in favour of the scheme.

Commenting on the merger, Allken's managing director and CEO, Martin Perez de Solay, said:

Arcadium Lithium will have the scale and expertise to meet the rapidly growing demand for lithium chemical products and the product flexibility required by customers while remaining committed to the delivery and execution of a significant growth pipeline.

Allkem's Chairman, Peter Coleman, adds:

The combination of Allkem and Livent is expected to create a highly complementary and vertically integrated business model to enhance operational flexibility and reliability, which is expected to result greater value capture across the lithium value chain.

What's next?

Livent shareholders also approved the merger yesterday, which means that Allkem will now apply to the Federal Court of Australia for approval of the scheme at a hearing today.

If all goes to plan, a copy of the court orders will be lodged with ASIC tomorrow and the scheme will become effective. Allkem shares will then be suspended from trade at the close of play on Thursday, with Arcadium Lithium shares commencing trade on Friday.

The post Allkem shares higher on merger approval news: what's next? appeared first on The Motley Fool Australia.

Will the market be able to build on this on Wednesday? Here are five things to watch:

ASX 200 expected to rise again

The Australian share market looks set for another good session on Wednesday following a solid night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 42 points or 0.55% higher this morning. In late trade on Wall Street, the Dow Jones is up 0.55%, the S&P 500 has risen 0.5%, and the Nasdaq is 0.5% higher.

Oil prices rise

It could be a good session for ASX 200 energy shares such as Beach Energy Ltd (ASX: BPT) and Woodside Energy Group Ltd (ASX: WDS) after oil prices pushed higher overnight. According to Bloomberg, the WTI crude oil price is up 1.5% to US$73.58 a barrel and the Brent crude oil price is up 1.65% to US$79.24 a barrel. Oil prices rose in response to Red Sea attacks.

Miners on watch

BHP Group Ltd (ASX: BHP) and Rio Tinto Ltd (ASX: RIO) look set to have another positive session on Wednesday after storming higher on Wall Street overnight. Both miners are likely to hit new 52-week highs today.

Gold price higher

ASX 200 gold shares such as Newmont Corporation (ASX: NEM) and Northern Star Resources Ltd (ASX: NST) could have a positive session on Wednesday after the gold price pushed higher. According to CNBC, the spot gold price is up 0.6% to US$2,052.6 an ounce. This was driven by softening bond yields.

Allkem merger approved

Allkem Ltd (ASX: AKE) shares will be on watch today after shareholders voted in favour of its merger with Livent Corp (NYSE: LTHM). That vote means that the lithium miner will leave the ASX boards later this week and be replaced with the stock of the merged entity, Arcadium Lithium. This is expected to occur on Friday.

The post 5 things to watch on the ASX 200 on Wednesday appeared first on The Motley Fool Australia.

In morning trade, the lithium miner's shares are up 4.5% to $10.51.

Why are Allkem shares pushing higher?

Investors have been buying the company's shares following a positive night of trade on Wall Street for lithium stocks and in response to the release of a couple of announcements.

In respect to the latter, one announcement reveals that Allkem has signed the Kapisikama Agreement in relation to the development and operation of the James Bay Lithium Project.

This is an Impact and Benefit Agreement (IBA) with the Grand Council of the Crees (Eeyou Istchee), the Cree Nation Government, and the Cree Nation of Eastmain.

Management highlights that the Kapisikama Agreement will govern the relationship between Allkem and the Cree Nation through a sustainable development approach based on mutual trust and respect during all phases of the project. Comex approval (Quebec government and CREE Nation) of the ESIA remains in progress.

What else?

Another announcement reveals that its existing international financing corporation (IFC) project financing has been supplemented by an additional US$50 million with IDB Invest for Allkem's Sal de Vida Project in Argentina.

Allkem's Managing Director and CEO, Martin Perez de Solay, said:

We are pleased to increase the size of the sustainability-linked green loans for Sal de Vida which combine ambitious environmental and social targets. These targets and commitments support the responsible and sustainable development of lithium for a greener future and regional economic growth in the province of Catamarca.

Voting no to the merger

Failing to hold back Allkem shares today is news that Ausbil is reportedly planning to vote against the company's merger with Livent Corp (NYSE: LTHM).

According to the AFR, the fund manager believes the proposed merger ratio doesn't properly reflect the nature and the size of Allkem's business compared to Livent's.

As things stand, Allem shares will make up 56% of the merged entity, Arcadium Lithium.

However, with a 3.3% stake, Ausbil will need a lot of support if it wants to prevent this lithium M&A deal from going ahead.

The post Why are Allkem shares racing higher again on Friday? appeared first on The Motley Fool Australia.

Three of them are outpacing the 0.6% gains posted by the ASX 200 on Friday morning.

One is lagging in the red.

Here's the scoop.

(Broker upgrade figures courtesy of The Australian.)

Four ASX 200 shares tipped for gains

First up, we have ASX 200 lithium share Allkem Ltd (ASX: AKE).

The Allkem share price is up 2.9% at the time of writing, trading at $10.35.

But Jarden Securities believes there are more gains ahead for Allkem, raising the stock to an 'overweight' rating with an $11.40 price target. That represents a potential 10.1% upside from current levels.

The second ASX 200 share getting an upgrade is medical imaging company Pro Medicus Ltd (ASX: PME).

The Pro Medicus share price is currently trading 1.4% higher at $94.60.

That still looks to be undervalued, according to JP Morgan. The broker's analysts have started their coverage of the stock at 'overweight' with a $100 price target on its shares. That represents a potential 5.7% upside from current levels.

Pro Medicus also pays out a small amount in dividends. Its shares trade on a fully franked trailing yield of 0.3%.

Which brings us to the third ASX 200 share getting an upgraded outlook, global packaging and distribution company Orora Ltd (ASX: ORA).

The Orora share price is down 1.2% at the time of writing, at $2.56. But Evans & Partners sees growth potential ahead, with a $3 price target on the company's shares. That represents a potential 17.2% upside from current levels.

And passive income investors take note. Orora shares trade on an unfranked trailing dividend yield of 6.8%.

Rounding off the list of the four ASX 200 shares enjoying broker upgrades is mining share Alumina Ltd (ASX: AWC), which owns 40% of Alcoa World Alumina & Chemicals (AWAC).

The Alumina share price is up 3.1% in late morning trade on Friday, at 90 cents.

But Barrenjoey sees that as a potential bargain, raising the mining stock to 'overweight' with a $1.10 price target on its shares. That represents a potential 22.2% upside from current levels.

The post These 4 ASX 200 shares were just upgraded by leading brokers appeared first on The Motley Fool Australia.

The post Here are the top 10 ASX 200 shares today appeared first on The Motley Fool Australia.

This ASX 200 lithium stock is having a day that puts most of the rest of the market to shame. At present, Allkem shares are up a stonking 8.96% at $9.97 each. That was after rising as high as $10.15 (up 10.9%) earlier this morning.

So what on earth is going on with the Allkem share price this Thursday?

Well, it's tricky to say. We did get some news out of the company this morning, which could be playing a role here.

As Allkem shareholders would be well aware, back in May this year the company announced that it would be undertkaing a "merger of equals" with the US-listed lithium giant Livent Corp (NYSE: LTHM). The new company, if all goes well, will be known as 'Arcadium Lithium'.

The merger has since got the green light from the Australian Foreign Investment Review Board. As well as various other international government agencies.

Allkem share price spikes amid new court date

However, today Allkem announced that a Federal Court of Australia hearing into the merger has been scheduled for 20 December later this month. Both Livent and Allkem shareholders are already due to vote on the proposed merger on 19 December.

It's possible that this news is getting investors riled up today. This does represent one of the final hurdles before the proposed merger can proceed, after all.

But we should also note that ASX lithium shares across the board are all seeing similar gains.

Take Pilbara Minerals Ltd (ASX: PLS). Its shares are presently up 8.02% at $3.77 each. Core Lithium Ltd (ASX: CXO) has gained 10.2% to 27 cents, while Sayona Mining Ltd (ASX: SYA) has rocketed 7.3% to 5.9 cents a share.

So it's also possible that Allkem shares are just getting in on this sector-wide party.

As my Fool colleague Bernd covered today, these gains in the lithium space look to be related to news out of the US Federal Reserve last night. The Fed held US interest rates steady in its December meeting, with chair Jerome Powell indicating that American inflation was coming under control.

The post Up 9%! What's going on with the Allkem share price today? appeared first on The Motley Fool Australia.

The post Here are the top 10 ASX 200 shares today appeared first on The Motley Fool Australia.

It's been a protracted plummet for lithium prices since they peaked in late 2022.

This week, the lithium carbonate spot price dropped to its lowest level since August 2021 at US$13,843 per tonne. That's a more than 80% fall in 2023 alone.

But over the past two days, Chinese lithium giants Tianqi Lithium Corp UP and Ganfeng Lithium Group Co Ltd have made strong gains.

Tianqi shares are up 6.1%. The stock has lost 31% of its value in the year to date. Ganfeng shares rose 6.1% over the two days, and are down by more than 40% in 2023.

US lithium stocks also moved higher over the two days.

NYSE-listed lithium stocks Albemarle Corporation gained 10.7%, Livent Corp went up 11.1% and Sociedad Quimica y Minr de Chile SA rose 6.1%.

Today, ASX lithium shares are also rising, with all the well-known names up by more than 2%.

Here are some examples:

• Core Lithium Ltd (ASX: CXO) shares are up 3.9%
• Allkem Ltd (ASX: AKE) shares are up 3.3%
• Mineral Resources Ltd (ASX: MIN) shares are up 3.1%
• Pilbara Minerals Ltd (ASX: PLS) shares are up 4.1%
• Sayona Mining Ltd (ASX: SYA) shares are up 7.4%
• Liontown Resources Ltd (ASX: LTR) shares are up 2.8%
• IGO Ltd (ASX: IGO) shares are up 2.1%.

The price pain is almost over, says analyst

Lithium prices are weak due to slowing growth in global sales of electric vehicles (EVs). This is leading to lower demand for lithium in China, the world's biggest EV manufacturer.

At the same time, the global lithium mining industry has been ramping up, and as a result, global stockpiles of the white metal have also increased.

But China Futures Co analyst Zhang Weixin said the downward trend in lithium prices is "already nearing an end".

Weixin reckons they are likely to bottom out between US$11,240 and US$12,650 per tonne (courtesy Australian Financial Review (AFR)).

Traxys advisor Wei Xiong agrees but says an extended period of weakness is still likely.

He says he'll be watching to see "whether high-cost mines will exit" if lithium prices get too low to make operations viable.

By the way, investors can find out how much it costs each miner to produce a tonne of lithium in their company reports.

At the recent Liontown Resources annual general meeting, chair Richard Goyder reminded shareholders that the estimated decade-average cost of production at Kathleen Valley was US$475 per tonne.

Thus, they'll still get "a healthy margin" despite the lithium spodumene concentrate price dropping to US$1,590 per tonne.

Goldman Sachs says lithium prices won't bottom till 2025

Top broker Goldman Sachs reckons lithium prices will finally reach a trough in 2025.

The broker recently downgraded its lithium price forecasts again.

It had been tipping US$15,000 p/t for lithium carbonate but is now forecasting US$11,000 p/t.

It was also forecasting US$16,500 p/t for lithium hydroxide but has reduced that to US$12,000 p/t.

The question is whether ASX lithium share investors should care about any of this short-term noise on lithium prices.

After all, this commodity will play a key role in the world's decarbonisation for decades.

The post Is the lithium price pain 'already nearing an end'? appeared first on The Motley Fool Australia.

The post Here are the top 10 ASX 200 shares today appeared first on The Motley Fool Australia.

This represents an almost 80% fall in the carbonate price in 2023 alone.

Unsurprisingly, this has dragged down the value of ASX 200 lithium shares over this period:

• Core Lithium Ltd (ASX: CXO) shares are down 76%
• IGO Ltd (ASX: IGO) shares are down 42%
• Allkem Ltd (ASX: AKE) shares are down 23%
• Mineral Resources Ltd (ASX: MIN) shares are down 22%
• Pilbara Minerals Ltd (ASX: PLS) shares are down 7.5%

What's happening with lithium prices?

We've got a significant supply and demand situation right now, and it seems to be getting worse.

Top broker Goldman Sachs has put out a note lowering its 12-month forecast for lithium prices again.

The broker was tipping US$15,000 p/t for lithium carbonate but is now forecasting US$11,000 p/t.

It was also predicting US$16,500 p/t for lithium hydroxide and has reduced that to US$12,000 p/t.

As my Fool colleague James reports, Goldman reckons lithium prices won't bottom til 2025.

Fresh analysis from Trading Economics points to pessimism about electric vehicle (EV) sales in China — the world's biggest producer of EVs — as the key catalyst for continually falling lithium prices.

Trading Economics analysts explain:

EV sales pessimism in China limited lithium demand for battery manufacturers in their typical restocking season. Instead, firms took advantage of high inventories following the supply glut caused by extensive subsidies from the Chinese government throughout 2021 and 2022.

The developments drove key market players to forecast the next lithium deficit to return only in 2028 …

Elsewhere, the EV sales in the US have missed expectations as higher credit costs hampered consumers' willingness to make large purchases. Meanwhile, output is set to remain robust.

Reuters reports that CITIC Futures forecasts domestic EV sales in China to grow by 25% to 9.44 million units next year, slowing from annual growth of 31% and 89% in 2023 and 2022, respectively.

On top of that, a slower growth rate is also projected for the energy storage sector, which is the second-biggest consumer of lithium, because of softening demand, CITIC says.

Should you care?

The dramatic fall in lithium prices this year, coupled with bearish forecasts for 2024, makes for depressing reading. But the question is, should short-term lithium price issues influence our investment decisions?

The falling commodities values don't seem to be influencing the investment decisions of the biggest brains in Australian mining, not to mention some of the biggest lithium companies in the world.

In 2023, amid crashing lithium prices, they've all been vying for a bigger share of the Australian lithium pie.

Here are some examples.

MinRes boss Chris Ellison recently took a 17.44% stake in Delta Lithium Ltd (ASX: DLI) and is now the board's non-executive chair. Hancock Prospecting boss Gina Rinehart is also a major shareholder.

Ellison also bought nearly a fifth of Wildcat Resources Ltd (ASX: WC8) last month.

Rinehart raided Liontown Resources Limited (ASX: LTR) and built a 19.9% stake in October while US takeover suitor Albemarle Corporation (NYSE: ALB) did its due diligence. That deal then fell over.

Rinehart and Ellison have both been buying Azure Minerals Ltd (ASX: AZS) shares after the junior miner accepted a $3.52 per share takeover from Chilean lithium giant Sociedad Quimica y Minr de Chile SA (NYSE: SQM). Ellison now reckons the SQM takeover is "dead in the water".

Meantime, the proposed merger of Allkem and Livent Corp (NYSE: LTHM) is moving full-steam ahead.

Clearly, these giants of the lithium industry are thinking long-term.

It begs the question as to whether we ordinary ASX investors should be doing the same and ignoring the current white noise on lithium prices.

In fact, maybe we should welcome it.

It's driving ASX lithium share prices down, and perhaps that will give us a phenomenal one-off opportunity to buy the dip at some stage in a mining sector with a very bright future.

The decarbonisation investment theme has decades to run, with lithium batteries set to play a monstrous role in the green energy transition.

The post Lithium price drops to lowest level since August 2021 but should you care? appeared first on The Motley Fool Australia.

In morning trade, the lithium industry is a sea of red with heavy declines being recorded across the board.

Here's a summary of how ASX 200 lithium shares are currently performing:

• The Allkem Ltd (ASX: AKE) share price is down 4% to $8.28.
• The Core Lithium Ltd (ASX: CXO) share price is down 10% to 23 cents.
• The IGO Ltd (ASX: IGO) share price is down 3.5% to $7.76.
• The Liontown Resources Ltd (ASX: LTR) share price is down 7% to $1.26.
• The Mineral Resources Ltd (ASX: MIN) share price is down 4% to $57.47.
• The Pilbara Minerals Ltd (ASX: PLS) share price is down 5.5% to $3.34.
• The Sayona Mining Ltd (ASX: SYA) share price is down 7% to 5.2 cents.

Why are ASX 200 lithium shares being sold off?

Today's weakness appears to have been driven by heavy selling in the industry on Wall Street overnight amid falling lithium prices.

Sociedad Química y Minera de Chile SA (NYSE: SQM) was one of the hardest-hit lithium stocks, dropping 8% during last night's session. Fellow giants Albemarle Corporation (NYSE: ALB) and Livent Corp (NYSE: LTHM) weren't far behind with declines of 5% and 5.5%, respectively.

Lithium prices continue to fall

According to a note out of Goldman Sachs, spot lithium prices have continued to fall since last week.

Its latest data has the following spot prices (per tonne):

• Lithium carbonate: US$16,112
• Lithium hydroxide – China: US$13,695
• Spodumene 6%: US$1,460

This means that prices have fallen 5.6%, 6.7%, and 7.6%, respectively, in the space of a week.

They are also now some distance away from their averages during the first quarter of calendar year 2023. At that point, spot prices per tonne were fetching the following per tonne:

• Lithium carbonate: US$63,232
• Lithium hydroxide – China: US$59,190
• Spodumene 6%: US$4,368

Unfortunately, Goldman sees more pain ahead and is forecasting prices to continue to soften in 2024 and 2025.

The post Why are ASX 200 lithium shares crashing today? appeared first on The Motley Fool Australia.

Keep in mind, Christmas is only three weeks away, so investors shouldn't focus on what could happen in such a short amount of time. The long-term is what matters the most.

What's going wrong for Allkem shares?

Lithium miners are suffering from the significantly lower lithium price.

For example, in the quarterly update for the three months to September 2023 compared to the three months to June 2023, it said the Mt Cattlin project saw a decline in the realised price from US$4,297 per tonne to US$2,625 per tonne of spodumene concentrate.

For Olaroz, the third-party price of lithium carbonate received for the three months to September 2023 was US$25,981 per tonne, down 32% quarter over quarter from US$38,062 in the three months to June 2023.

A business can't make as much profit if the resource price is lower, as this largely cuts into net profit after tax (NPAT) – production costs are going to be the same, whether the lithium price is US$1,000 per tonne higher or lower.

Allkem is currently in the process of merging with Livent, and the Livent share price has also dropped heavily this year – it's down 42% in the past six months. A decline for Livent, in theory, should mean a similar decline for Allkem.

After the transaction combination has been completed, Allkem shareholders will own approximately 56% of the business, which is to be called Arcadium Lithium.

Could the ASX lithium share reach $10?

It's certainly possible, the market could surprise us both positively or negatively.

Getting back to $10 would represent a rise of over 15% for the Allkem share price, but that'd only take us back to a price seen in October 2023. Earlier this year it was trading above $16.

I'm not sure what would be the catalyst that would excite investors considering there is a lot of lithium supply coming online and Christmas is just around the corner. Forecasting wider (macro) economic events is not my ideal investment strategy, particularly for the short term.

I don't know what's going to happen, even for the longer term. Allkem's leadership is excited by the growth of electric vehicle sales, which is on course to increase around 35% year over year to around 14 million in the 2023 calendar year.

The ASX lithium share notes the adoption rate of electric vehicles is expected to increase at a compounding annual growth rate (CAGR) of 18% over the next decade, with lithium demand expected to increase 3.5 times by 2030. However, stronger demand doesn't guarantee higher lithium prices or growth of the Allkem share price.

Writing on The Bull, Jabin Hallihan from Morgans said:

We retain an add rating despite the short-term risks of softer lithium prices. Our share price target of $14.10 reflects AKE's growth potential. The shares were trading at $9.42 on November 9. We believe the company offers long term value despite challenges within the sector.

The post Can Allkem shares reach $10 by Christmas? appeared first on The Motley Fool Australia.

Some leading ASX lithium stocks more than doubled in value as the price of the battery-critical metal soared to all-time highs in November 2022 amid surging demand and limited new supplies.

But 2023 has been a decidedly different story.

On one side, demand has taken a hit. That decline is being driven by China, the world's biggest lithium consumer, which ended EV subsidies and other incentives for the industry this year.

And with more global mines entering production, supplies have been ramping up just as demand has crimped.

This has seen the price of lithium carbonate crash more than 75% this year. And as you'd expect, it's put some serious pressure on ASX 200 lithium shares.

Here's how these Aussie miners have performed over the past 12 months:

• Pilbara Minerals Ltd (ASX: PLS) shares are down 13%
• Core Lithium Ltd (ASX: CXO) shares are down 20%
• Allkem Ltd (ASX: AKE) shares are down 11%
• IGO Ltd (ASX: IGO) shares are down 8%
• Liontown Resources Ltd (ASX: LTR) shares are down 26%

While all of the above shares are still well into the green over the longer term, the past year has clearly been a struggle.

So, what can ASX investors expect in the year ahead?

What's ahead for ASX 200 lithium shares in 2024?

ASX 200 lithium shares could certainly still see some big moves higher in 2024. But that looks like it will have to be driven by their own exploration, mining, and deal-making successes, and not any turnaround in the lithium price.

According to the latest analysis from Goldman Sachs (courtesy of The Australian Financial Review) investors can expect the global lithium market to be in a 202,000 tonne surplus in 2024.

The broker's commodities analysts noted this "represents 17% of global demand". Therefore, they said they "expect prices to trade deeply into the cost curve to balance the market".

According to Goldman's analysts:

In this context, we maintain our bearish view on the lithium market and lower our 12-month target for China Lithium Carbonate (excluding VAT) to US$11,000 a tonne and CME Asia CIF Lithium Hydroxide to US$12,000/t (from US$15,000/t and US$16,500/t respectively previously).

Lithium carbonate was trading for just over US$16,000 per tonne on Friday.

Among the headwinds facing the lithium price, and by connection ASX 200 lithium shares, Goldman Sachs cited a marked decline in Chinese lithium battery demand volume growth.

"The rise in chemical output has overtaken the growth in China battery output and China's imports of spodumene concentrate (+60 per cent y/y YTD) – particularly from Australia and Zimbabwe – have continued to grow sharply," the analysts said.

They concluded:

At the same point, there remains little evidence of supply rationing, with only an estimated 40kt [kilotonne] of supply loss over the past 12 months due to cost pressures. However, with the market largely balanced year to date, the full extent of supply-led surplus is yet to be realised, with prices still 33% above the top-end of the integrated cost curve.

With lithium prices potentially facing another significant slide in 2024, I expect we'll be hearing more about cost-cutting measures from ASX 200 lithium shares in the year ahead.

The post Buying ASX 200 lithium shares? Here's the 2024 lithium price forecast from Goldman Sachs appeared first on The Motley Fool Australia.

Although it is on course to record a small gain today, that doesn't change much on a monthly basis.

For example, if things stay the same way, the lithium miner's shares will record a November decline of 11%.

Why were Allkem shares sold off in November?

Investors have been hitting the sell button this month after lithium prices continued to fall.

For example, according to data from Goldman Sachs, the lithium carbonate price was fetching US$19,542 per tonne on 3 November. Whereas at the weekend, it was trading 12.6% lower at US$17,076 per tonne.

It was even worse for spodumene (6%), which was commanding a price of US$2,010 per tonne on 3 November, but at the weekend was down 21.3% to just US$1,580 per tonne.

These prices are a long way from the averages of 2022 when lithium carbonate was going for US$59,868 per tonne and spodumene (6%) was fetching US$4,368 per tonne.

Broad weakness in the industry

As you might imagine given the decline in lithium prices, it isn't just Allkem shares that have suffered this month.

Elsewhere in the industry, Core Lithium Ltd (ASX: CXO) shares are down 25% this month, Liontown Resources Ltd (ASX: LTR) shares have lost 15% of their value, and Sayona Mining Ltd (ASX: SYA) shares are down almost 20%.

Is this a buying opportunity?

The team at Goldman Sachs believes Allkem shares are great value at current levels if you're brave enough.

Despite being bearish on lithium, the broker has a buy rating and lofty $10.90 price target on its shares. This implies a potential upside of 28% for investors over the next 12 months.

It said: "We continue to prefer low-cost assets of scale into lithium price declines (Buy IGO for FCF/ AKE for growth)."

The post Why are Allkem shares down 11% in November? appeared first on The Motley Fool Australia.