Why did the Lake Resources share price plunge 10% today?

The Lake Resources NL (ASX: LKE) share price slipped deep into the red in afternoon trade on Monday.

At the close of trade, Lake Resources shares finished 10.13% down at $1.07 apiece on no news.

In broad market moves, the S&P/ASX 300 Metals and Mining Index (ASX: XMM) also finished the day down, 2.42% lower.

What’s up with the Lake Resources share price?

Lake shareholders have been on a rollercoaster journey these past three months, as seen in the chart below.

Prices have swung from highs of $1.66 in June to lows of 60.5 cents by 15 July, back up to highs of $1.59 on 11 August.

Now, investors have pushed the Lake Resources share price back down to its current ranges. And just last week, we noted the share had surged 75% in the past month of trade.

As to reasons for the downside today, lithium pricing certainly wasn’t to blame. Lithium carbonate remains up 336% year on year and is up nearly 3.5% over the past month.

The metals and mining industry caught a sell today, however. As mentioned above, the benchmark metals and mining index is down 2.42%, signalling a heavy sell-off in the basket today.

Moreover, recent earnings posted by fellow lithium player Pilbara Minerals Ltd (ASX: PLS) also pointed to pricing strengths within the lithium market.

Not to mention, that the United States Congress’ recent Inflation Reduction Act effectively “extends tax breaks for new electric vehicle purchases,” per Trading Economics.

“On the supply side, the energy crisis in China brought by record-setting heat waves led multiple lithium producers in Sichuan to suspend operations, adding to the upside of soaring lithium costs in the near-term,” it added.

Alas, the Lake Resources share price continues its decline of recent weeks.

Despite this, it remains up more than 94% over the past 12 months of trade.

The post Why did the Lake Resources share price plunge 10% today? appeared first on The Motley Fool Australia.

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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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