Australian lithium stocks experienced a sharp sell-off on Monday, triggered by an 8 per cent plunge in Chinese lithium carbonate futures, which fell to 73,120 yuan per tonne. The decrease prompted investors to take profits after a strong rebound in ASX-listed lithium companies over the past month.
Pilbara Minerals bore the brunt of the downturn, tumbling 11.4 per cent to $3.70. Other major players also saw significant declines: Liontown Resources shed 8.5 per cent to 86¢, IGO fell 6.6 per cent to $7.00, and Mineral Resources declined 6.8 per cent to $30.11. Mineral Resources is a diversified resources company, with extensive operations in mining services, iron ore, lithium and energy. Pilbara Minerals is a leading lithium producer focused on its flagship Pilgangoora project.
Despite Monday’s losses, both Mineral Resources and Pilbara Minerals – which have been heavily targeted by short sellers – have rebounded more than 50 per cent since June, highlighting the sector’s recent volatility. The lithium market has been subject to increased short selling over the past year as lithium prices have fallen.
Analysts at Canaccord Genuity have recently adopted a bullish outlook on the lithium sector, citing a faster-than-expected recovery in electric vehicle demand. This resurgence is reportedly diminishing the existing lithium market glut, potentially signaling a more positive trajectory for lithium prices and related stocks in the near term.
