Lithium juniors shrug off oversupply fears; some make double-digit gains
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While most junior Aussie lithium stocks continued to tread water on Tuesday, there were positive signs among a handful that made double-digit gains.
Of 36 lithium-related ASX stocks tracked by Stockhead, 17 were back in the green, nine held steady, and 10 lost ground. (See table below).
Lithium stocks opened the week in the red after Chilean heavyweight SQM said it would ramp up production to meet rising demand from the electric vehicle market.
A four-to-sixfold increase in SQM’s production could force lithium into oversupply by 2020.
Some stocks were looking slightly better on Tuesday after the initial shock of the potential oversupply died down and some junior players proved they still believe in the long-term story.
Cougar Metals (ASX:CGM) was the biggest lithium gainer. Its shares climbed 20 per cent to 1.2c on news it appointed a new general manager that would help fast-track its Ceara lithium project in Brazil and shop for new projects.
Price changes for ASX-listed lithium stocks Jan 22-23
Krakatoa Resources (ASX:KTA) and Hannans (ASX:HNR), both jumped more than 13 per cent to 0.6c and 0.3c, respectively, on no news.
Sayona Mining (ASX:SYA) gained as much as 11.4 per cent after it revealed it had secured an option to acquire 12,000 hectares of lithium-prospective tenements in Quebec, Canada. By the closing bell it had edged back to 8.5c.
Sayona has had a good run in recent months, with its share price hitting a new 52-week high of 12c earlier in January.
Lithium is among the favoured battery metals, with demand driven by electronics and the electric vehicle uprising that is forecast to reach over 500 million vehicles by 2040 from 2 million currently.