Why did the Core Lithium share price end the month lower after being up 35%?

The Core Lithium Ltd (ASX: CXO) share price had a disappointing time in November.

The lithium developer’s shares fell 2.1% over the period to end the month at $1.36.

This compares unfavourably to the ASX 200 index, which rose 6.1% last month.

What happened to the Core Lithium share price last month?

Things were actually looking very positive for the Core Lithium share price for the first half of the month. In fact, its shares climbed as much as 35% to a record high of $1.88 on 14 November.

This was driven by optimism over the outlook for lithium thanks to the electric vehicle boom. And with Core Lithium on the cusp of commencing production at the Finniss Lithium Project in the Northern Territory, investors were betting on it generating bumper free cash flow in the near future.

The company also announced the transportation of its first spodumene direct shipping ore (DSO) product from the project. Core CEO Gareth Manderson labelled it a milestone for Core. He said:

The transportation of DSO today is another signification milestone for Finniss, and is a very positive step towards our objective to export from Darwin Port before the end of the year.

The decline

Unfortunately, the Core Lithium share price didn’t stay at those lofty levels for long. A day after hitting a record high, it started its downward trend and wiped out its month to date gains and some more.

This appears to have been driven by bearish notes out of Credit Suisse and Goldman Sachs warning that lithium prices were heading meaningfully lower.

In addition, analysts at Macquarie downgraded Core Lithium’s shares to a neutral rating with a $1.80 price target. Its analysts are concerned that the Finniss project could be delayed following high level management departures and bad weather. In fact, the broker suspects that production could be delayed until FY 2024.

Here’s hoping for a better showing from the Core Lithium share price in December.

The post Why did the Core Lithium share price end the month lower after being up 35%? appeared first on The Motley Fool Australia.

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More reading

• Here are the 3 most heavily traded ASX 200 shares on Thursday
• Can you guess which 3 ASX 200 lithium shares led the charge in November?
• 2 ASX lithium shares to buy, and 3 to sell: brokers
• Why has the Core Lithium share price crashed 30% in 12 days?
• Here are the 3 most heavily traded ASX 200 shares on Tuesday

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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