Why is the Core Lithium share price down 14% in two days?

The Core Lithium Ltd (ASX: CXO) share price is under pressure on Wednesday.

At the time of writing, the lithium miner’s shares are down 8% to 22 cents.

This means that its shares are now down approximately 14% since this time on Monday.

What’s going on with the Core Lithium share price?

The company’s shares have come under pressure this week amid broad weakness in the lithium industry.

This appears to have been driven by concerns that a recent lithium price rebound could be short-lived.

Investors were scrambling to buy ASX lithium shares last week after prices in China suddenly rebounded.

But since then, an update out of Tesla (NASDAQ: TSLA) seems to have taken the wind out of lithium’s sails.

As we covered here, Tesla shipped 60,365 vehicles from its Shanghai-based factory in February. That’s down almost 16% from January and is its the lowest number of shipments in more than two years. This doesn’t bode well for short-term demand for lithium.

Goldman remains bearish

In addition, this week the team at Goldman Sachs reiterated its bearish view on lithium prices.

As you can read here, its analysts continue to believe that lithium prices will remain around current levels for a long time to come.

This could be particularly bad news for the Core Lithium share price, as the company is currently in the process of deciding what to do with its Finniss Operation, which has been suspended to conserve cash.

Last week, it came to an agreement with its mining contractor, Lucas Total Contract Solutions, to terminate the Finniss mining services agreement.

Management advised that it will now look to identify alternative mining solutions for the open pit “should it restart in the future.”

The post Why is the Core Lithium share price down 14% in two days? appeared first on The Motley Fool Australia.

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More reading

• Why are ASX lithium shares like Pilbara Minerals crashing on Tuesday?
• Why the 2024 outlook for these rebounding ASX 200 lithium shares looks ‘better than market expectations’
• Guess which 4 shares are being dumped from the ASX 200 index
• Here’s the latest lithium price forecast through to 2027
• These are the 10 most shorted ASX shares

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 positions in and has recommended Tesla. 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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