The Liontown Resources Ltd (ASX: LTR) share price is starting the week much like it finished the last one.
In morning trade, this lithium developerâs shares were down as much as 9% to $1.82.
This meant that the Liontown share price was down 17% over the last two weeks.
Why is the Liontown share price sinking?
Investors have been hitting the sell button in the lithium industry again amid ongoing concerns that lithium prices could be about to pullback.
This follows bearish notes out of Credit Suisse and Goldman Sachs recently and soaring COVID cases in China. The latter has led to concerns that demand for lithium from the key market could soften and put pressure on prices.
On Wall Street on Friday, the Sociedad Quimica y Minera de Chile (SQM) share price dropped almost 7%, the Livent Corp share price fell almost 9%, the Lithium Americas share price dropped 7%, and the Albemarle dropped close to 4%.
Is this a buying opportunity?
One broker that is likely to see this as a buying opportunity is Macquarie. Earlier this month, the broker retained its outperform rating and lifted its price target on the lithium developer’s shares to a lofty $3.40.
Based on the current Liontown share price, this implies potential upside of almost 90% for investors over the next 12 months.
While the broker sees economic slowdowns and rising COVID cases in China as a headwind for the lithium market, it still expects sky high prices to remain.
The post Why is the Liontown share price sinking 9% on Monday? appeared first on The Motley Fool Australia.
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More reading
- Here are the 3 most heavily traded ASX 200 shares on Friday
- 5 ASX lithium shares to buy: brokers
- Here are the top 10 ASX 200 shares today
- Why Liontown, Lovisa, Myer, and Whitehaven Coal shares are pushing higher
- Why is the Lake Resources share price smashing the ASX 200 on Monday?
Motley Fool contributor James Mickleboro 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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