Why is the Lake Resources share price rising 6%?

jump in asx share price represented by man leaping up from one wooden pillar to the nextjump in asx share price represented by man leaping up from one wooden pillar to the next

The Lake Resources NL (ASX: LKE) share price is leaping today, just a day after being added to the S&P/ASX 200 Index (ASX: XJO).

The company’s shares are currently trading at $1.49, a 5.67 gain. For perspective, the S&P/ASX 200 Materials Index (ASX: XMJ) is up 0.04% at the time of writing.

Let’s take a look at why the Lake Resources share price could be jumping today.

Lithium prices in focus

The Lake Resources share price is rising today, but it is not alone. Core Lithium Ltd (ASX: CXO) is jumping 6.7% and was also an addition to the index as part of the June 2022 quarterly rebalance. The Allkem Ltd (ASX: AKE) share price is rising slightly, up 0.77%, while Mineral Resources Limited (ASX: MIN) is 0.12% in the green. In contrast, Liontown Resources Limited (ASX: LTR) is slipping 0.81% while Sayona Mining Ltd (ASX: SYA) is flat.

In news overnight, it has emerged a recent move by Argentina to set a reference value for lithium carbonate prices may not impact lithium prices as much as first thought.

ASX lithium shares plunged last Wednesday after news Argentina had set a reference price for lithium carbonate exports of US$53 per kilogram.

A report out of S&P Global Commodity Insights overnight quoted Chinese lithium carbonate producers stating “overseas prices won’t drop drastically following Argentina’s announcement”. A source said:

The aim of the reference value is actually to prevent sellers from avoiding tax evasion by declaring low prices with customs.

Hence, we don’t see any impact of this announcement on the spot market in the near term.

Lake Resources aims to produce lithium carbonate from the Kachi Lithium Brine Project in Argentina by 2024.

Share price snapshot

The Lake Resources share price has soared 451% in the past year while it has jumped 48% year to date.

For perspective, the ASX 200 has lost nearly 1% in a year.

Lake Resources has a market capitalisation of about $2 billion based on its current share price.

The post Why is the Lake Resources share price rising 6%? appeared first on The Motley Fool Australia.

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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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