Why are ASX lithium shares getting slammed again on Monday?

ASX lithium shares are getting hammered again on Monday after also struggling on Friday.

Lithium shares in the red today include:

• Core Lithium Ltd (ASX: CXO), sliding 3.37%
• Liontown Resources Ltd (ASX: LTR), down 6%
• IGO Ltd (ASX: IGO), down 2.59%
• Lake Resources N.L. (ASX: LKE), falling 4.31%
• Allkem Ltd (ASX: AKE), sliding 0.08%

Let’s take a look at what could be impacting ASX lithium shares today.

What is going on?

ASX lithium shares may be falling amid concerns about the lithium price and some analyst notes.

The lithium carbonate price in China fell 0.53% to 562,500 yuan on Friday. As my Foolish colleague James reported this morning, Goldman Sachs and Credit Suisse have recently put out bearish notes amid concerns about falling demand from China.

Lithium shares in the United States also had a horror day on Friday. For example, the Livent Corp (NYSE: LTHM) share price descended 8.81% while Sociedad Quimica y Minera de Chile (NYSE: SQM) lost 6.8%.

Meanwhile, Morgan Stanley has revealed its institutional desk could be looking at selling lithium shares. This follows the addition of Pilbara and IGO to the MSCI index on Wednesday. Analysts, quoted by The Australian, said:

There is no doubt that lithium is a very crowded trade heaved higher by retail exposure, but a side effect of this is IGO, PLS replacing DMP/EVN in an MSCI index on Wednesday.

Index funds and traders front running them generally buy in the lead up, then sell after the inclusion, but given the incredible performance in lithium, our insto desk is looking for selling, and the catalyst may come from the Chinese protests.

In other news, South China Morning Post reported yesterday that Chinese EV battery producers will exceed domestic electric-car makers’ demand threefold by 2025.

What else is happening?

The Pilbara Minerals Ltd (ASX: PLS) share price is outperforming other ASX lithium shares today amid joint venture news. Pilbara shares are up 0.11% at the time of writing. The lithium company has executed a joint venture agreement with Calix Ltd (ASX: CXL) to develop a mid-stream demonstration plant.

Commenting on this news, Managing director and CEO Dale Henderson said:

It’s a great privilege to enter this JV partnership with Calix. The Mid-stream project has the potential to be a game changer for our industry.

If successful, we will be able to deliver a superior chemical intermediary product to market compared to spodumene concentrate.

The post Why are ASX lithium shares getting slammed again on Monday? appeared first on The Motley Fool Australia.

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More reading

• Why is the Liontown share price sinking 9% on Monday?
• Here are the 10 most shorted ASX shares
• Why is the Allkem share price diving 8% today?
• Here are the 3 most heavily traded ASX 200 shares on Friday
• What could be sending the Pilbara Minerals share price 7% lower today?

Motley Fool contributor Monica O’Shea 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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