Why have ASX lithium shares had such a lousy month in June?

Lithium shares were once the golden child of the ASX, but the last month dragged many deep into the red.

In fact, many of the market’s favourites have tumbled by more than 20% since the start of June, seemingly driven by experts’ bearish sentiment and concerns about demand.

Here’s how some of the ASX’s most renowned lithium shares performed over the last 30 days, as of Wednesday’s close:

• Pilbara Minerals Ltd (ASX: PLS) – down 22%
• Core Lithium Ltd (ASX: CXO) – down 29.6%
• Allkem Ltd (ASX: AKE) – down 22.7%
• Liontown Resources Limited (ASX: LTR) – down 21.1%
• Sayona Mining Ltd (ASX: SYA) – down 27.2%
• Lake Resources NL (ASX: LKE) – down 48.7%

For context, the S&P/ASX 200 Index (ASX: XJO) has slipped 7.4% so far in June, while the S&P/ASX 200 Materials Index (ASX: XMJ) has fallen 9.9%.

Read on to learn what went so wrong for shares involved in the battery-making commodity.

What weighed on ASX lithium shares this month?

ASX lithium shares suffered a major downturn on the first day of June and failed to recover throughout the month.

The sell-off event came amid news Goldman Sachs expects demand for lithium to fall in the future, while a Chinese electric vehicle manufacturer reportedly announced its plan to source its own lithium from mines in Africa.

On top of that, Argentina set a reference price for lithium carbonate exports.

Interestingly, my Fool colleague James Mickleboro pointed out, Goldman Sachs had been bearish on lithium for months before the sell-off.

Additionally, other brokers have shown far more optimism about the future of lithium prices, as The Motley Fool Australia’s Brendon Lau reported.

The rollercoaster for lithium stocks continued later in the month. They plunged once more last week amid reports Germany was considering not banning petrol and diesel cars by 2035.  

Here’s what went down with lithium stocks in June

The inclusion of some well-known ASX lithium shares in the ASX 200 wasn’t enough to turn the tide this month. Core Lithium and Lake Resources both made it into the all-important index. Meanwhile, Mineral Resources Limited (ASX: MIN) was bumped into the S&P/ASX 50 Index (ASX: XFL) on 20 June.

Neither was news Pilbara Minerals accepted an “unprecedented” pre-auction bid for its next lithium cargo. The company also announced it expected to increase its production by 54% in the third quarter.

Meanwhile, Liontown signed offtake agreements with Tesla and Ford. It also approved the development of its Kathleen Valley lithium project this month.

Finally, Sayona announced the discovery of a potentially world-class deposit and the planned restart of its North American Lithium operation this month.  

The post Why have ASX lithium shares had such a lousy month in June? appeared first on The Motley Fool Australia.

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Motley Fool contributor Brooke Cooper 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 Goldman Sachs and 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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