Australia’s leading lithium miners have been amongst the worst performers on the market this year.
They have fallen heavily after weakening demand and an oversupply of the battery making ingredient sent prices crashing lower.
However, a rare spot of positive news has sent their shares charging higher on Monday. Here’s a snapshot of how the lithium miners are performing today:
The Galaxy Resources Limited (ASX: GXY) share price is up 2% to 85.2 cents.
The Mineral Resources Limited (ASX: MIN) share price is 2% higher at $13.64.
The Orocobre Limited (ASX: ORE) share price has jumped 5% to $2.43.
The Pilbara Minerals Ltd (ASX: PLS) share price is up 4.5% to 29.25 cents.
Why are the lithium miners climbing higher?
Investors appear to have been buying lithium shares today in response to news that protesters in Chile have blocked access to lithium operations in the country.
According to Reuters, protesters from indigenous communities around Chile’s Atacama salt flats are blocking access as part of ongoing nationwide rallies over inequality.
Lithium giant SQM and Albermarle have operations in the region and are believed to have been impacted. A local leader told Reuters that a road blockade had shut down SQM’s operations since Wednesday.
Whereas Albemarle’s operations have been impacted by road blockades on Wednesday and Friday, leading to shift workers adjusting their schedules.
Investors may be optimistic that these protests will continue for a significant period of time, potentially leading to a reduction in supply of the white metal. This could ease the pressure on prices, which have been on a downward trend all year.
Should you invest?
Whilst a sharp rebound in lithium prices would make these lithium miners attractive, I think it is far too soon for investors to get excited. After all, these protests could be over before you know it. After which, lithium prices would most likely continue sinking.
In light of this, I would suggest investors stay clear of them and focus on other areas of the market.
The post Why Orocobre and these ASX lithium miners are charging higher appeared first on Motley Fool Australia.
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Motley Fool contributor James Mickleboro owns shares of Galaxy Resources Limited. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
The Motley Fool's purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. 2019