Why are ASX 200 lithium shares struggling on Monday?

ASX 200 lithium shares are having a tough run on the market today.

Lithium shares in the red today include:

• Core Lithium Ltd (ASX: CXO), plunging 5%
• Sayona Mining Limited (ASX: SYA), sliding 1.3%
• Liontown Resources Ltd (ASX: LTR), down 4%
• Allkem Ltd (ASX: AKE), falling 0.2%

However, the Pilbara Minerals Ltd (ASX: PLS) share price is bucking the trend today, up 1.25% after falling 1% into the red in earlier trade. For perspective, the S&P/ASX 200 (ASX: XJO) is climbing 0.76% today.

What’s going on?

Lithium demand sentiment could be weighing on ASX 200 lithium shares. Lithium is an essential component of Electric vehicle (EV) batteries.

The lithium hydroxide price has fallen 0.73% to US$81,300 on the London Metal Exchange. Meanwhile, lithium carbonate has slid 0.44% to CNY 447,500.

Meanwhile, news emerged on Friday that Tesla Inc (NASDAQ: TSLA) had cut the prices on the majority of its electric cars. As my Foolish colleague Mitch reported, the major price changes could signal EV demand may be less than previously forecast.

However, this move will mean more of Tesla’s vehicles will be eligible for a US federal tax credit, The New York Times reported. Tesla also slashed EV prices by up to 13% in China last week, the Verge reported.

Lithium giant Sociedad Quimica y Minera de Chile (NYSE: SQM) fell 1.58% on the New York Stock Exchange on Friday, while Albermarle Corporation (NYSE: ALB) shares slid 0.4%. Meanwhile, a recent broker downgrade could be continuing to weigh on Core Lithium shares today. Goldman Sachs placed a “sell” rating on the Core Lithium share price with a 95 cent price target. Analysts are concerned Core Lithium “looks relatively expensive” versus peers and raised concerns about the company’s Finniss project. Goldman said:

We see production risk as the Finniss project moves through ramp up on project complexity (moving between different open pits and underground configurations), and the required exploration/resource upside to support capacity expansion/life extension currently priced into the stock looks significant.

Share price snapshot

The Core Lithium share price climbed 19% in the last year.

The Allkem share price has risen nearly 9% in the past 52 weeks.

Liontown Resources shares have slid 13% in the past year.

Pilbara Minerals shares have jumped 8% in the last year.

Sayona Mining shares have soared 50% in the last year.

The post Why are ASX 200 lithium shares struggling on Monday? appeared first on The Motley Fool Australia.

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More reading

• Why is the Core Lithium share price tumbling 6% on Monday?
• Here are the 10 most shorted ASX shares
• Which ASX lithium shares are forecasting to pay dividends in 2023?
• 2 ASX 200 mining shares to buy as China reopens: analysts
• Own ASX lithium shares? Here’s the latest lithium price forecast

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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