High Voltage: Has the lithium bubble burst or is this a buying opportunity?

Mining

7 hours ago | Reuben Ad

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Our High Voltage column wraps all the news driving ASX stocks with exposure to lithium, cobalt, graphite, nickel, rare earths, manganese, magnesium, and vanadium.

After a huge collective performance in 2021, the froth has been blown off lithium stocks this year.

Producers like Pilbara Minerals (ASXLS) are recording double digit share price losses in 2022 despite posting some very impressive H1 profits, driven by a LCE price which is up 562% year-on-year.

The small cap contingent isn’t doing any better.

Is the general malaise affecting markets to blame? Has the lithium bubble burst … or is this a buying opportunity?

This is a buying opportunity, says Niv Dagan, founder and exec director at Peak Asset Management.

“From a Peak Asset Management view, we feel that investors should be using this opportunity to add to their lithium exposure,” he told *.

“Following production cuts, the lithium supply glut has ended, and the market is now tightening, as the EV revolution accelerates.

“This is also well supported by the global commitment to decarbonisation.

“More recently Macquarie Bank advised clients that the lithium market is emerging faster than expected on the back of stationary energy storage systems and they encouraged ‘material upgrades to forecast demand for lithium over the short and medium term’.

“Credit Suisse echoed Macquarie’s buoyant lithium analysis, advising clients that it would be “brave to resist lithium momentum”.”