Why are Core Lithium shares lifting another 5% on Tuesday?

Shares of Core Lithium Ltd (ASX: CXO) are pushing 5% into the green on Tuesday and now trade at $1.465 apiece.

Today’s jump extends gains for the lithium player and brings this year’s return to almost 150%, amid a continued rally in the price of lithium.

Lithium carbonate now trades at A$120,047 per tonne, another all-time high. The battery material has now gained 95% year to date.

The chart below shows Core Lithium’s performance (in black) against the broader S&P/ASX 300 Metals and Mining Index (ASX: XMM) which has slipped 5% in 2022 so far.

What’s up with Core Lithium shares?

Core Lithium’s upcoming offtake agreement with electric vehicle manufacturer Tesla has been in focus following the electric vehicle giant’s recent quarterly earnings.

Core Lithium is one of three ASX-listed companies chosen by Tesla to help fulfil its enormous lithium supply requirements.

Whilst Tesla delivered a record 343,000 cars during the period, revenue was behind analyst expectations, and this has triggered questions on the demand situation looking ahead.

Core’s deal with Tesla would see it produce spodumene concentrate for four years starting in 2023. As such, it represents a large opportunity for the company.

News of the agreement has been a major catalyst for the share’s performance this year to date, alongside the price of lithium.

With prices of the battery metal still punching above record highs, momentum remains in Core’s favour, particularly given the enthusiasm for renewables and battery technology.

It’s also worth noting it was Tesla’s revenue expectation that fell short, not the number of cars it delivered. In Tesla’s case, it suggests demand is still robust.

Certainly, investors remain bullish on Core Lithium shares on Tuesday.

Trading volume has already hit 48% of the four-week trading average with 17.8 million shares exchanging hands in early trade.

Meanwhile, Core Lithium shares are up 157% in the past 12 months.

The post Why are Core Lithium shares lifting another 5% on Tuesday? appeared first on The Motley Fool Australia.

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More reading

• Here are the 3 most heavily traded ASX 200 shares on Monday
• Here are the top 10 ASX 200 shares today
• Here are the 3 most heavily traded ASX 200 shares on Friday
• Is the Core Lithium share price at risk following Tesla’s disappointing earnings?
• Here are the 3 most heavily traded ASX 200 shares on Thursday

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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