Day: 1 June 2022

The National Australia Bank Ltd. (ASX: NAB) share price failed to continue its upwards trajectory in May.

The banking giant’s shares dropped around 3% last month following the company’s half year results amidst the market volatility.

In contrast, the S&P/ASX 200 Index (ASX: XJO) also ended May in the red, shedding 2.88% over the same time frame.

And NAB wasn’t the only ASX 200 financial share to suffer, with Australia and New Zealand Banking Group Ltd (ASX: ANZ) sinking 7.5% in May.

Let’s take a look at what might have weighed on NAB shares recently.

What happened to NAB in May?

The NAB share price finished lower than it started last month, dragged down by weakened investor sentiment.

Regardless of the company registering a mostly positive set of numbers in its half yearly scorecard, the market expected a slightly better result.

The bank achieved cash earnings from continuing operations of $3,480 million, reflecting a 4.1% increase over the prior corresponding period. However, Goldman Sachs had estimated NAB to report cash earnings from continuing operations of $3,545 million in H1 FY22.

This led investors to backtrack on NAB shares by 0.59% to $32.25 following the company’s release. Another 1.95% loss also came the day after.

Looking ahead, management noted that recent data showed the ongoing strength in the Australian economy.

Consumption has rebounded strongly from lockdowns and is expected to remain robust supported by accumulated household savings. This, combined with a healthy outlook for business investment leads to a forecasted GDP growth of 3.4% over 2022 and 2.1% over 2023.

NAB share price summary

Despite heading south last month, the NAB share price has actually risen by 9% in 2022.

Its shares reached a 52-week high of $33.75 in April, before being sold off in the run up to its interim results.

It’s worth noting that even at today’s prices, the company’s shares are trading are pre-COVID-19 levels.

NAB commands a market capitalisation of roughly $100.34 billion, making it the fourth largest company on the ASX.

The post Why did the NAB share price go backwards in May? appeared first on The Motley Fool Australia.

More reading

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. 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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The Paladin Energy Ltd (ASX: PDN) share price is down almost 9% on Wednesday, trading at 72.5 cents at the time of writing.

Despite no market-sensitive updates from the company today, investors continue selling off Paladin shares, extending the company’s losses to more than 17% for the year to date.

In broader market moves, the S&P/ASX 200 Energy Index (ASX: XEJ) is also trading around 0.26% lower after cooling off in recent weeks.

What’s up with the Paladin Energy share price?

Energy stocks soared to stardom in early 2022 as prices for their underlying commodities raced to multi-year highs.

Prices for the nuclear energy source uranium exploded in February amid concern in global energy markets about conflict in Europe.

Traders drove the price of uranium above its 10-year highs where it peaked at US$64.50 per pound in April, before receding to its 2021 levels again.

It is still up 54% year on year despite an 11% consolidation in the past month of trade.

With Paladin restarting the Langer Heinrich uranium mine in Namibia, the company is aiming to “take advantage of the improving uranium market conditions and deliver sustainable value creation”, according to its CEO Ian Purdy.

It appears market pundits are continuing to trade Paladin shares in response to volatility in the underlying uranium market.

The graph below illustrates the correlation between the price of the June 2022 uranium futures contract (in yellow), the broad energy index (XEJ in red), and the Paladin Energy share price (in blue) since March.

As seen above, both the Paladin Energy share price and the price for uranium have started to diverge from the wider energy sector, with all three recording losses in May.

In the last 12 months, the Paladin Energy share price has gained 46%, trading as high as $1.03 and as low as 63.5 cents since September 2021.

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Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. 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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The Core Lithium Ltd (ASX: CXO) share price is slumping today, down 8.2%.

Shares in the S&P/ASX 200 Index (ASX: XJO) lithium producer closed yesterday at $1.40 and are currently trading for $1.28.

The Core Lithium share price had been trending higher since Labor’s election win, with the new government’s commitment to steeper emissions cuts spurring interest in critical battery metals like lightweight, conductive lithium.

But new research out from Goldman Sachs looks to have reversed that trend, with most every ASX lithium share deep in the red today.

What is Goldman Sachs forecasting?

The global broker believes that investor exuberance has exceeded current market reality in the lithium space.

Despite noting that “battery metals will play a crucial role in the 21st century global economy”, Goldman said (quoted by The Australian), “We see the battery metals bull market as over for now.”

The end of the current bull market, Goldman added, comes after “a surge in investor capital into supply investment tied to the long-term EV demand story… has in turn generated an outsized supply response well ahead of the demand trend in focus.

“In this context, we see prices on a downward trajectory over the course of the next two years, with a sharp correction in lithium, and to a lesser extent cobalt.”

Core Lithium share price snapshot

No one likes to see a stock they’re holding sink 8% on any given day.

But even with today’s fall factored in, the Core Lithium share price remains a top performer over the mid and long-term.

Year-to-date, shares are up 108%, compared to the 5% loss posted by the ASX 200.

If you’d bought shares 12 months ago, you’d be sitting on a gain of 429%.

And the Core Lithium share price is up an eye-popping 1,714% over the past 5 years.

The post Core Lithium share price tumbles 8% as Goldman forecasts ‘sharp correction in lithium ‘ appeared first on The Motley Fool Australia.

More reading

• Why is the Pilbara Minerals share price cratering 17% today?
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• Here’s why the Core Lithium share price is storming higher
• Here are the top 10 ASX shares today
• Lighting up the market: ASX lithium stocks surge again on Tuesday

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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The Sayona Mining Ltd (ASX: SYA) share price is tanking on Wednesday despite only silence from the company. However, there’s been plenty of news on lithium ­lately.

At the time of writing, the Sayona share price is 18.75 cents, 14.77% lower than its previous close.

For context, the S&P/ASX 200 Index (ASX: XJO) has just tipped into the red, down 0.03%, while the All Ordinaries Index (ASX: XAO) is also down 0.21%.

Let’s look at what might be weighing on the lithium explorer and developer’s shares on Wednesday.

What’s going wrong with the Sayona share price?

The Sayona share price is suffering alongside many of its peers on Wednesday.

The sell-off facing numerous lithium miners might have been spurred by negative sentiment about the value of lithium and a major decision from Argentina.

The South American nation has set a reference price of US$53 per kilogram of lithium, reports The Australian.

The decision reportedly comes after Argentina flagged irregularities in shipments.

Additionally, Goldman Sachs was said to have tipped the end of the battery metals boom earlier this week.

“[W]e see the battery metals bull market as over for now,” Goldman analysts Nicholas Snowdon and Aditi Rai were quoted by Bloomberg as saying.

They reportedly predict the spot price of lithium will fall to slightly higher than US$16,000 per tonne next year.

Though, the analysts were said to believe lithium’s value will take off again in the second half of the decade.

It’s impossible to say whether the happenings are weighing on the Sayona share price today. But at least it’s not alone in the red.

It’s joined by lithium giants Allkem Ltd (ASX: AKE), Core Lithium Ltd (ASX: CXO), Mineral Resources Limited (ASX: MIN), and Pilbara Minerals Ltd (ASX: PLS).

And despite today’s falls, the Sayona share price is around 48% higher than it was at the start of 2022. It has also gained 348% since this time last year.

The post Why is the Sayona Mining share price tumbling 14% on Wednesday? appeared first on The Motley Fool Australia.

More reading

• Here’s why the Sayona Mining share price is leaping 6% today
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Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs. 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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The Pilbara Minerals Ltd (ASX: PLS) share price is plummeting today.

The lithium explorer’s shares have fallen 17.3% at the time of writing. For perspective, the S&P/ASX 200 Materials Index (ASX: XMJ) is down 0.98% so far.

Let’s take a look at what could be impacting the Pilbara Minerals share price.

Lithium price outlook

Pilbara Minerals shares are falling, but they are not the only lithium share to plunge. The Core Lithium Ltd (ASX: CXO) share price is down nearly 12% today, Liontown Resources Ltd (ASX: LTR) is 16% lower, and Allkem Ltd (ASX: AKE) is sliding 12%.

Investors could be selling down lithium shares after Goldman Sachs put out a note warning of a “sharp correction” in lithium prices in the next two years.

Goldman has predicted the lithium price could fall from US$60,350 per tonne to around US$54,000 per tonne in 2022. But, by 2023, Goldman estimates lithium could fall to US$16,372 per tonne.

In a recent note cited by Bloomberg, Goldman analysts Nicholas Snowdon and Aditi Rai predicted the “battery metals bull market” is over“. The analysts said:

Investors are fully aware that battery metals will play a crucial role in the 21st century global economy.

Yet despite this exponential demand profile, we see the battery metals bull market as over for now.

Goldman is also predicting the price of nickel and cobalt to fall in 2022 and 2023.

Meanwhile, following the Goldman report, Credit Suisse has downgraded Pilbara Minerals from “outperform” to “neutral”, The Australian reported. The broker has placed a price target of $3 on the company’s share price.

Pilbara is developing the Pilgangoora Lithium Tantalum Project in Western Australia.

In overseas markets, the Lithium Americas Corp (NYSE: LAC) share price tanked nearly 13% on the New York Stock Exchange on Tuesday. However, in after-hours trading in the US, it is recovering slightly, up 1.83%.

Share price snapshot

The Pilbara Minerals share price has soared 104% in the past year but has dropped 21% year to date.

For perspective, the S&P/ASX 200 Materials Index has climbed nearly 4% over the past 12 months and more than 6% so far this year.

Pilbara Minerals has a market capitalisation of about $7.5 billion.

The post Why is the Pilbara Minerals share price cratering 17% today? appeared first on The Motley Fool Australia.

More reading

• Why are ASX lithium shares tanking on Wednesday?
• ASX 200 midday update: NAB completes acquisition, lithium miners sink, Origin tumbles
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• Why has May been such a great month for the Allkem share price?
• Here are the 3 most traded ASX 200 shares on Tuesday

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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The Boss Energy Ltd (ASX: BOE) share price is having a woeful day on the ASX despite the company’s latest positive announcement.

At the time of writing, the uranium producer’s shares are swapping hands at $2.30, down 5.35%.

Boss Energy share price falls on Honeymoon decision

The Boss Energy share price is falling today despite the board’s final investment decision (FID) regarding the Honeymoon Uranium Project.

This comes as the broader sector containing Boss and its peers is treading lower in Wednesday’s trade.

Shares in fellow miners Paladin Energy Ltd (ASX: PDN) and Deep Yellow Limited (ASX: DYL) are down 9.12% and 4.64%, respectively.

According to the Boss Energy release, its board of directors approved the FID to develop Honeymoon this year.

The company will now accelerate construction, ensuring Honeymoon remains on track for first production in the quarter ending December 2023.

This will ramp up to a steady-state rate of 2.45Mlb of triuranium octoxide (U3O8), a compound of uranium, per year.

Boss Energy completed the pivotal front-end engineering design (FEED) study during the previous quarter.

It showed that Honeymoon will be an economically robust project with an internal rate of return (IRR) of 47% at a US$60/lb of U308.

The all-in sustaining cost (AISC) is forecast to be around US$25.60/lb over the life of the mine.

In March, Boss Energy secured $125 million through a capital raise to fund the development of its Honeymoon project. This includes $113 million of estimated capital development costs for re-starting Honeymoon.

What did management say?

Boss Energy managing director Duncan Craib commented on the company’s progress:

This final investment decision puts Boss firmly on track to be Australia’s next uranium producer.

We are fully-funded with no debt, fully-permitted and extensive infrastructure in place. Our front-end engineering studies are completed and we are ready to order key equipment and start construction immediately.

This puts us in an extremely strong negotiating position with utilities and ensures we can capitalise on the looming uranium supply deficit.

In parallel with the above achievements, the uranium price has continued to hold steady. As a result, the value of Boss Energy’s 1.25 million pound stockpile of U308 is $59.38 million.

The combination of the company’s successful raising and uranium stockpile means it’s fully funded through to production and cash flow at Honeymoon.

The Boss Energy share price is up around 2% for the first six months of this year.

The post Boss Energy share price slides 5% despite project milestone appeared first on The Motley Fool Australia.

More reading

• Why is the Liontown share price crashing 16%?
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• ASX 200 midday update: NAB completes acquisition, lithium miners sink, Origin tumbles

Motley Fool contributor Aaron Teboneras has positions in Paladin Energy Ltd. 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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The Liontown Resources Limited (ASX: LTR) share price has started the month deep in the red.

In afternoon trade, the lithium developer’s shares are down 16% to $1.19.

Why is the Liontown share price crashing lower?

Investors have been selling down the Liontown share price on Wednesday amid broad weakness in the lithium industry.

This appears to have been driven largely by a bearish note out of Goldman Sachs in relation to lithium prices.

That note reveals that its analysts believe that lithium prices have peaked and will be falling materially in the coming years.

However, it is worth noting that this isn’t exactly a new view from Goldman. As we covered here around a month ago, its commodities team have been warning that lithium prices will peak this year and then start to retreat.

It is also worth noting that not all analysts agree with this view. Some believe that demand will continue to outstrip supply and keep prices elevated for longer.

The recent BMX auction from Pilbara Mineral Ltd (ASX: PLS) appears to back up this bullish view. Once again, the lithium giant announced a record bidding price for its spodumene concentrate at last month’s auction.

Are the bulls or the bears correct?

The fact of the matter is that nobody knows what lithium prices will do next. There is an abundance of lithium out there in the world, which is why BHP Group Ltd (ASX: BHP) won’t touch the stuff, but how soon it can get to market is impossible to predict.

That’s what makes lithium shares such a high risk option for investors and is likely to mean the Liontown share price remains quite volatile for the foreseeable future.

The post Why is the Liontown share price crashing 16%? appeared first on The Motley Fool Australia.

More reading

• Why ASX lithium shares have ‘absolutely more room to run’ in 2022: expert
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. 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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ASX lithium shares had been handily outperforming the benchmark since Anthony Albanese and the Labor party swept into Canberra last week.

With Labor spruiking tougher commitments to emissions reductions, investors were rewarding producers of the critical battery metal.

Until today.

In late morning trade some of the biggest ASX lithium shares are deep in the red.

How deep?

The Allkem Ltd (ASX: AKE) share price is down 12%; shares in IGO Ltd (ASX: IGO) have lost 13%; and the Pilbara Minerals Ltd (ASX: PLS) mineral share price has tanked 16%.

Ouch.

So, what’s going on?

Argentina and Goldman Sachs

It looks like Argentina, a nation with some of the largest known lithium reserves on Earth, gets some of the blame.

According to The Australian, Argentina has set a reference price for lithium carbonate exports of US$53 per kilogram. This comes after irregularities were detected in shipments over the past two years.

Bloomberg noted, “The reference price strengthens customs’ capacity to oversee exports and avoid under-invoicing.” This reportedly helps “avoid manoeuvring that impacts tax revenues and dollar sales”.

Separately, Goldman Sachs came out with a bearish medium-term outlook for lithium prices that looks to be weighing on ASX lithium shares today.

According to Goldman (courtesy of The Australian):

With climate change top of mind, investors are fully aware that battery metals will play a crucial role in the 21st century global economy, just as bulk and base metals did before them. Yet despite this exponential demand profile, we see the battery metals bull market as over for now.

Crucially, with no prior large-scale demand or supply cycle behind them, these ‘new economy’ commodities have avoided copper and aluminium’s ‘Revenge of the Old Economy’ investment trap.

Indeed, the reverse has occurred, with a surge in investor capital into supply investment tied to the long-term EV demand story, essentially trading a spot driven commodity as a forward-looking equity.

That fundamental mispricing has in turn generated an outsized supply response well ahead of the demand trend in focus. In this context, we see prices on a downward trajectory over the course of the next two years, with a sharp correction in lithium, and to a lesser extent cobalt.

Not everyone is bearish on ASX lithium shares

Despite today’s sharp pullback, longer-term investors in leading ASX lithium shares will have little to complain about.

Over the past 12 months, the IGO share price is up 46%; the Allkem share price is up 85%; and the Pilbara share price is up 100%.

And investors with long term horizons may wish to look ahead to 2030.

According to Barrenjoey, “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 post Why are ASX lithium shares tanking on Wednesday? appeared first on The Motley Fool Australia.

More reading

• ASX 200 midday update: NAB completes acquisition, lithium miners sink, Origin tumbles
• These were the best performing ASX 200 shares in May
• Why has May been such a great month for the Allkem share price?
• Here are the 3 most traded ASX 200 shares on Tuesday
• Why ASX lithium shares have ‘absolutely more room to run’ in 2022: expert

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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

What happened

Shares of electric-car maker Tesla (NASDAQ: TSLA) stalled out of the gate on Tuesday, after Barron’s commented that analyst estimates for the company’s Q2 production levels “look a little high.” As of 10:10 a.m. ET, Tesla stock is down 2.5%. 

So what

If you recall, it’s been a week since Tesla announced plans to resume full-speed production of electric vehicles (EVs) at its Shanghai gigafactory in China — 2,600 cars per day, 949,000 cars per year, and a big boost toward the company’s goal of building 1.5 million EVs this year. One week later, though, Bloomberg reports that the company is still only up to 70% of production capacity, or about 1,800 cars per day. 

However, it’s important to factor in the loss of perhaps 100,000 cars worth of production already in Q1 and Q2 from COVID restrictions in China that impeded production, as well as slower-than-planned production ramps at Tesla’s gigactories in Texas and Germany. When these factors are taken into account, Barron’s calculates that Tesla might produce only 300,000 — or even 260,000 — electric vehicles this quarter. And that suggests that Tesla will fall far short of its 1.5 million-unit goal this year. 

Now what

This explains why some investors might feel inclined to sell Tesla today, before it gets a chance to confirm the “production miss.” I think that’s an overreaction and probably a mistake.

Consider this: Tesla probably won’t produce 1.5 million cars this year (but it still might — with Elon Musk, you never know). But you can hardly blame Tesla for missing a goal if it only misses because of COVID restrictions imposed by a sovereign government. Even if Tesla fails to produce 1.5 million cars this year, the fact that it’s already ramping back up to full capacity in China means that it might produce 1.5 million EVs (or more) next year.

In short, investors shouldn’t focus on the sales goal for any one year because of the quirks of health regulation in one single country — but rather, on the trend of increasing, accelerating production levels at Tesla factories being built all around the world.

Long term, the trend for this stock’s growth is still up. Don’t get too frightened over one down day. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Why the Tesla share price stalled on Tuesday appeared first on The Motley Fool Australia.

More reading

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Rich Smith has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Tesla. 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. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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The election of the Labor government has many investors wondering what the future holds for ASX hydrogen shares. The newly-formed cabinet is dedicated to a green economy, which includes hydrogen as an important part of that equation.

Hydrogen, specifically green hydrogen, is seen as a key contributor to the goal of electrifying everything, and it’s expected to play an important role in industrial applications. However, that isn’t to say the sector isn’t without its risks.

If you’re thinking about investing in ASX hydrogen shares, here’s what you should know.

What’s the plan for hydrogen?

Energy has become a hot topic as the world faces its greatest energy crisis since the 1970s. A global fossil fuels shortage was already being felt last year, now exacerbated by the conflict between Russia and Ukraine.

This has prompted the International Energy Agency (IEA) to describe the current situation as a “much bigger” crisis than that of the 70s. Portraying the significance of the situation, IEA executive director Fatih Birol said:

Back then it was just about oil. Now we have an oil crisis, a gas crisis, and an electricity crisis simultaneously.

Australia’s fresh faces in Parliament will be looking to reduce the country’s reliance on dinosaur bones. As laid out in its policies, Labor is targeting a commitment to net zero emissions by 2050 with the interim aim of reducing emissions by 43% by 2030.

In turn, ASX hydrogen shares such as Fortescue Metals Group Limited (ASX: FMG), Pure Hydrogen Corporation (ASX: PH2), and Province Resources Ltd (ASX: PRL) could be set to benefit.

However, two industry experts are cautioning investors about the volatility that comes with hydrogen investments. Firstly, KPMG partner and head of climate change and sustainability Adrain King warned:

If we’re going to achieve our ultimate goals, then hydrogen is probably required. But it is still in the innovation stage; it’s very small and still pilot-based compared to what it would need to be.

Similarly, Saxo Markets strategist Jessica Amir said:

The (hydrogen) market is very volatile at the moment. There are a lot of hydrogen companies on the ASX and the smaller ones, in particular, are probably worth staying away from just because of the volatility.

How have ASX hydrogen shares performed?

The performance of ASX hydrogen shares this year is split between small-caps and large-caps. Those with a market capitalisation below $200 million have lost the support of investors, resulting in heavy losses.

Whereas the likes of established companies, such as Fortescue Metals and AGL Energy Limited (ASX: AGL), although not pure-play hydrogen shares, have managed a positive performance.

The post Investing in ASX hydrogen shares? Here’s what you should know appeared first on The Motley Fool Australia.

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• Why is the Fortescue share price tumbling 4% today?

Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. 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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