Australian lithium stocks experienced a significant upswing on Wednesday, defying a slight dip in spodumene prices the previous day. This surge suggests a possible shift in investment strategies, with fund managers potentially reallocating capital to the previously underperforming sector. The gains were notable among some of the most heavily shorted companies listed on the ASX.
Leading the charge was Liontown Resources, which saw its stock price jump by 7.1 per cent as of 12.10pm AEST on Wednesday. Pilbara Minerals, Australia’s largest pure-play lithium miner, also performed strongly, rising by 6.2 per cent. Mineral Resources recorded a 4.2 per cent increase, while IGO experienced a gain of 2.4 per cent. Pilbara Minerals is focused on lithium and tantalum concentrate production. IGO is a mining and exploration company with a focus on metals critical to clean energy.
The resurgence in lithium stocks follows a rebound in spodumene prices earlier in the month, which triggered a wave of short covering in Liontown Resources, Mineral Resources, and IGO last week. According to Perennial’s Natural Resources Trust portfolio manager Sam Berridge, there is a growing inclination among several funds to direct investments towards the most heavily shorted stocks within the resources sector, a category in which lithium prominently features.
