What is boosting Core Lithium’s (ASX:CXO) shares?

October 26, 2022 01:51 PM AEDT | By Bhawna Gupta

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What is boosting Core Lithium’s (ASX:CXO) shares? — Image source: © Radius06 | Megapixl.com

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Highlights

Core Lithium's shares were spotted trading at AU$1.48 each, up 0.85% on ASX at 12.45 PM AEDT.

This is in line with ASX 200 materials index which was 0.70% up at 15,665 points at 12.46 PM AEDT.

Shares of Core Lithium Ltd (ASX:CXO) were trading in the green today. At 12.45 PM AEDT, the lithium company’s shares were spotted trading at AU$1.48 each, up 0.85% on ASX today (26 October). This is in line with ASX 200 materials index which was 0.70% up at 15,665 points at 12.46 PM AEDT. On Tuesday, Core Lithium's shares closed at AU$1.47 each, up 4.99% from its previous close.

Why are Core Lithium's shares trading higher today?

In its most recent quarterly update, Tesla informed that it has selected three ASX-listed firms, including Core Lithium, to assist in meeting its substantial lithium supply needs. The agreement between Core and Tesla calls for it to produce spodumene concentrate for four years beginning in 2023.

In addition, the price of lithium is at record high currently amid rise in demand for renewable energy and battery technology. Lithium is now trading at CNY552500/T, up almost 10% monthly and over 190% on y-o-y. https://tradingeconomics.com/commodities

How's lithium doing in Australia?

According to Australian Bureau of Statistics (ABS), lithium is mostly exported from Australia. The country supplied 46% of the world's lithium in 2020, and exports of the metal are predicted to rise further in the coming years, bringing in AU$9.4 billion in revenue for the Australian economy by 2023–2024.

The main lithium mineral extracted from pegmatite in Australian lithium mines is spodumene concentrate, which is also the most popular lithium mineral source. Lithium hydroxide, which is preferable for batteries, and lithium carbonate are produced through additional processing of spodumene. Spodumene concentrate is the main type of lithium exported from Australia.

Exports of lithium concentrates increased by AU$1,073 million (1189%) from June month 2021 to a new high of AU$1,163 million in June 2022. Monthly lithium shipments did not reach AU$250 million for the whole of 2021. Export values began to rise quickly in the latter half of 2021, when they nearly doubled between November and December of that year. Lithium shipments nearly doubled once more between April and May 2022, and they finally reached AU$1 billion in June 2022.

Lithium exports increased by AU$2,318 million (737%) from the June quarter of 2021 to AU$2,632 million for the June quarter of 2022. Since January 2021, Western Australia has contributed more than 99% of all Australian lithium exports on a monthly basis.

Core Lithium’s stock performance

Shares of Core Lithium have grown over 17% in the last month and little over 9% in the last six months. However, the lithium company's shares have jumped more than 134% on a YTD basis.

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