Why are Core Lithium shares seeing so much action in August?

Core Lithium Ltd (ASX: CXO) shares are certainly getting plenty of attention this month.

Just three hours after market open today, more than 9.5 million shares have changed hands, with a value of more than $13.3 million. A figure that’s sure to rise significantly before market close.

At time of writing, Core Lithium shares are down 1.1% at $1.38 apiece.

What’s driving ASX investor interest in August?

The biggest day of trading so far this month saw more than 55 million shares change hands on 16 August. Though that wasn’t the only day that trades topped 50 million this month.

So, why are Core Lithium shares seeing so much action in August?

On a company-specific level, the company kicked off the month well.

On 1 August the explorer reported “world-class high-grade lithium intersections” at its Finniss Lithium Project, located near Darwin in the Northern Territory.

On a broader level, a large part of ASX investor interest in Core Lithium shares looks to be driven by the strong global outlook for lithium.

According to Trading Economics data, lithium carbonate prices in China extended their rally in the final full week of August.

Lithium prices remain right near all-time highs, just off their March 2022 records.

Supplies for the light weight, highly conductive metal remain tight while demand is soaring.

Lithium is a crucial component in EV and grid storage batteries. And as the world looks to decarbonise, EV growth is rocketing. Growth that’s led by China, the world’s most populous nation and number two economy.

In August, the China Passenger Car Association (CPCA) reported a total of 571,000 EV sales for the month of June, up 141% year on year and setting a new monthly record high. CPCA is forecasting an 84% increase in EV sales in China, to 5.5 million vehicles for all of 2022.

Atop record sales in China, August also saw the United States extend tax credits for new EV purchases as part of US$347 billion earmarked for climate and energy spending. News that likely spurred fresh interest in Core Lithium shares.

How have Core Lithium shares been tracking?

While there have been some significant downswings in 2022, the bullish momentum has seen Core Lithium shares charge 119% higher since the opening bell on 4 January. By comparison, the All Ordinaries Index (ASX: XAO) is down 7% year-to-date.

The post Why are Core Lithium shares seeing so much action in August? appeared first on The Motley Fool Australia.

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More reading

• Could Pilbara’s inaugural profit signal good times ahead for ASX lithium shares?
• Here are the 3 most heavily traded ASX 200 shares on Monday
• Down 16% in a week, what’s next for the Core Lithium share price?
• Could ASX battery minerals shares be in for a boost next month?
• Why has the Core Lithium share price rocketed 50% in a month?

Motley Fool contributor Bernd Struben 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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