Why is the Core Lithium share price tumbling 5% on Friday?

The Core Lithium Ltd (ASX: CXO) share price is powering down on Friday despite no announcements from the company.

At market open, shares in the lithium producer were in the green before quickly reversing their gains.

Currently, the Core Lithium share price is $1.29, down 5.2%.

Let’s take a look at what could be driving the falling value of this ASX lithium share today.

Core Lithium shares suffer on Chinese woes

Investors are continuing to offload Core Lithium shares amid negative sentiment impacting the wider materials sector.

For context, the S&P/ASX 200 Materials Index (ASX: XMJ) is the worst performing sector across the ASX on Friday. It is deep in negative territory, down by 1.95% today, and 8.5% for the week.

As reported by Reuters, the ongoing crisis in China’s property market and manufacturing industry is having a ripple effect across the globe.

At first, the country’s COVID-19 restrictions stalled economic growth as hubs went into strict lockdown. However, this appears to be happening all over again as fresh outbreaks have occurred in key cities.

Furthermore, China’s property woes along with weakened demand in the private sectors, and power shortages, are disrupting production.

In turn, this is putting pressure on commodity prices.

While the lithium price has remained stable for now, other commodities haven’t been so fortunate with red across the board.

Both iron ore and copper prices have tanked 7% in the past week. Steel is down 5% and platinum is retracing 4%.

Nonetheless, it is evident that the world’s second-largest economy is at risk of backtracking on GDP growth.

China experienced a slight increase in GDP by 0.4% in the second quarter from a year ago.

Where commodity prices go from here now all depends on China’s next GDP data.

Core Lithium share price summary

Despite its recent falls, the Core Lithium share price has surged 265% higher over the past 12 months.

When looking at year to date, the shares are up 103%.

Based on today’s price, Core Lithium commands a market capitalisation of approximately $2.35 billion.

The post Why is the Core Lithium share price tumbling 5% on Friday? appeared first on The Motley Fool Australia.

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More reading

• Why Core Lithium, Mineral Resources, PointsBet, and Strike Energy are dropping
• Here are the 3 most heavily traded ASX 200 shares on Thursday
• How did the Core Lithium share price perform in August?
• Top ASX shares to buy in September 2022
• Could this new piece of legislation be a boost for ASX lithium shares?

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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