The Orocobre Limited (ASX: ORE) share price has been a strong performer on Tuesday.
In morning trade, the lithium miner’s shares are up 6.5% to a record high of $10.08.
Why is the Orocobre share price at a record high?
The catalyst for the rise in Orocobre share price today appears to have been the release of its annual general meeting update.
While the event didn’t contain a great deal of new information, there were a couple of items that may have got investors excited.
The first is the outlook for lithium supply and demand. The company expects lithium demand to grow materially through to 2040 due to electric vehicle adoption and the global transition to carbon neutrality.
This is expected to lead to a widening deficit over the next two decades, with demand predicted to be more than twice as great as supply by 2040. As a result, the presentation reveals that analysts at Roskill are predicting that this will keep prices at sky high levels long into the future.
What else did the company reveal?
Also potentially giving the Orocobre share price a boost was commentary on current pricing.
The release notes that the company’s Mt Cattlin operation continues to experience strong demand and pricing momentum. So much so, the average price for the December quarter is estimated to be $1,650 per tonne for 6.0% Li2O. This is almost double the September quarterly average.
It was a similar story for its Olaroz brine operation, which has revised its December quarter pricing upwards to US$12,000 per tonne.
Is the Orocobre share price in the buy zone?
One broker that is bullish on the Orocobre share price is Citi.
While it has yet to respond to its annual general meeting update, it currently has a buy rating and $11.00 price target on its shares. This implies further potential upside of 9% for Orocobre’s shares.
The post Why the Orocobre (ASX:ORE) share price is up 6% to a record high today appeared first on The Motley Fool Australia.
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Motley Fool contributor James Mickleboro owns shares of Orocobre Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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