Guess which little-known ASX lithium share has surged 75% in the past month

The price of lithium carbonate continues to be top-heavy in August, having curled upward in the past two weeks of trade.

From 17 August to date, the price of the key battery metal has caught a bid and gained 1.45% to A$102,690 per tonne.

Prior to this, lithium carbonate had remained steady since May, after a small dip in prices that saw the metal trade sideways, as seen below.

This market behaviour has been nothing but positive for the Lake Resources N.L (ASX: LKE) share price this past month, as seen in the above chart.

The little-known ASX lithium share has gained 75% in the past month of trade after a choppy period leading into the new financial year.

During August alone, it has traded in a range of 83 cents to $1.59, currently resting at $1.225 apiece.

Pricing looks positive for the industry

The earnings result this week from fellow lithium player Pilbara Minerals Ltd (ASX: PLS) also suggests that demand for lithium remains high.

Pilbara posted a 577% jump in annual revenue to $1.2 billion, citing demand for both its lithium and spodumene concentrate as reasons behind the increase.

Certainly, Pilbara Minerals is positioned further along the value chain than Lake Resources in that it already produces and sells lithium material.

However, heightened demand, based on several macroeconomic factors, could keep lithium prices top-heavy in the years to come.

For instance, “soaring demand drove expectations of extended supply deficits” in the 12 months to August, resulting in a 400% gain in prices, Trading Economics says:

On top of that, mid-year maintenance for producers drove carbonate output to contract 4% on the month to 30,320 tonnes during July.

In the US, demand for new energy vehicles is set to increase as the newly passed “Inflation Reduction Act” extends tax breaks for new electric vehicle purchases.

As such, ASX lithium shares like Lake Resources have strengthened and reclaimed a good chunk of losses suffered earlier in the year.

The Lake Resources share price is still up more than 105% for the past 12 months, of 21% this year to date.

The post Guess which little-known ASX lithium share has surged 75% in the past month appeared first on The Motley Fool Australia.

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More reading

• Could Pilbara’s inaugural profit signal good times ahead for ASX lithium shares?
• Here are the 3 most heavily traded ASX 200 shares on Tuesday
• Why is Lake Resources underperforming other ASX 200 lithium shares right now?
• These are the 10 most shorted ASX shares
• Here are the 3 most heavily traded ASX 200 shares on Friday

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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