ASX lithium shares have been amongst the top performers on the index over the past 12 months.
This comes on the back of soaring prices for the lightweight, conductive metal. Lithium is a core component in the rapidly growing battery market that’s powering the global rise of EVs.
So, what kind of outperformance are we talking about?
Well, since this time last year the All Ordinaries Index (ASX: XAO) is up 1%.
Over that same time, ASX lithium share Pilbara Minerals Ltd (ASX: PLS) has gained 141.9%; the Mineral Resources Limited (ASX: MIN) share price has leapt 41%; Allkem Ltd (ASX: AKE) shares have gained 113.3%; IGO Ltd (ASX: IGO) is up 67.1%; and the Liontown Resources Limited (ASX: LTR) share price has rocketed 153.6%.
With those kinds of gains behind them, can ASX lithium shares continue to deliver?
Absolutely, according to Saxo Markets strategist Jessica Amir.
ASX lithium shares lift off on Labor victory
With Labor sweeping into power last week, numerous analysts are tipping lithium explorers and producers can continue their outperformance in 2022.
That’s in part based on Labor’s greater focus on emissions reductions, with Prime Minister Anthony Albanese saying Australia has the potential to be a “renewable energy superpower”.
“Already, just since the government was sworn in this week,” Amir said, ASX lithium shares “have been some of the best performers on the local market. And there’s absolutely more room to run.”
According to Amir (quoted by The Australian):
We expect the lithium price to hit new highs this year. And that’s not only because of the momentum for increasing demand, but there’s now a punitive lack of supply. And on top of this, we’re getting this government support.
Massive growth in EVs forecast
For some insight into the booming demand for lithium helping propel ASX lithium shares higher, Barrenjoey said, “Electric Vehicles are set to transform the lithium and nickel commodity markets. We forecast global EV sales growing to 30 million in 2030 or around 30 per cent of new car sales.”
The future, of course, is unknown.
Should an alternative environmentally friendly power source become economically viable, like hydrogen perhaps, lithium demand could fall sharply.
But for now, it appears ASX lithium shares have plenty of runway to keep charging ahead.
The post Why ASX lithium shares have ‘absolutely more room to run’ in 2022: expert appeared first on The Motley Fool Australia.
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More reading
- What’s the outlook for the Pilbara Minerals share price in June?
- Here are the 3 most traded ASX 200 shares on Monday
- 2 ASX All Ordinaries shares rocking new 52-week highs today
- Liontown Resources share price leaps 4% amid Tesla offtake extension
- 3 ASX lithium shares set to roar back: experts
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 Scott Phillips.
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