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ASX lithium shares have been punished considerably in 2022 to this point, regardless of a unbroken strong surroundings for lithium pricing and expectations of sturdy demand.
In 2022 thus far, the Pilbara Minerals Ltd (ASX: PLS) share worth has fallen by nearly 40%.
The Allkem Ltd (ASX: AKE) share worth has dropped by 14% — not as a lot as others, however nonetheless double-digits.
A few of these are huge declines.
The market fundamentals for battery grade lithium carbonate are sturdy, with lithium demand forecast to develop 25% to 35% each year over the following decade with a major provide demand deficit anticipated from the second half of this decade.
Latest lithium pricing stays sturdy
Pilbara Minerals likes to utilise the Battery Materials Change (BMX) to promote a few of its lithium.
Simply two weeks in the past, the corporate introduced it had achieved one other wholesome worth with its sixth scheduled digital public sale – the accepted provide was a pre-auction bid.
It offered a cargo of 5,000dmt on a 5.5% lithia foundation , with the provide being US$6,350 per dry metric tonne. Pilbara stated it was “happy” with the “sturdy” responses from bidding contributors.
On the time, the incoming Pilbara Minerals managing director and CEO Dale Henderson stated:
That is an distinctive final result which supplies additional proof of the unprecedented demand for battery uncooked supplies being skilled throughout the worldwide lithium-ion provide chain right now.
Opposite to current solutions that the market has peaked, the proof we’re seeing on the coal-face with our prospects, together with the pricing final result, means that demand stays extremely sturdy, with a continued wholesome outlook for the foreseeable future.
Dealer worth targets
With share costs down closely, lithium costs remaining sturdy, and ongoing demand forecast, is that this a lovely time to purchase ASX lithium shares?
Macquarie charges the Pilbara Minerals share worth as a purchase, with a worth goal of $4.20, after the current sturdy efficiency of money stream and manufacturing. That means a attainable rise of greater than 90% within the subsequent 12 months on the present worth of $2.17.
The dealer charges Allkem as a purchase, with a worth goal of $17. That means an increase of near 80% on the present worth of $9.60, if the dealer is right.
Macquarie charges Liontown as a purchase, with a worth goal of $1.85. That means a attainable rise of greater than 90% on the present 95 cents, after bearing in mind the current deal introduced with Ford.