ASX lithium shares across the board have jumped higher in the new year.
At the time of writing, the Galaxy Resources Limited (ASX: GXY) share price leads the pack, gaining 11% today. The Orocobre Limited (ASX: ORE) share price is 8.81% higher and the Pilbara Minerals Ltd (ASX: PLS) share price is 7.75% higher.
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Breath of life into ASX lithium shares
ASX lithium shares have surged in recent months on the back of bottoming lithium prices and increasing optimism for a renewables revolution.
Lithium spot prices have been in a downtrend since 2018, when the industry was inundated with new producers and supply. It wasn't until recently that lithium prices finally began to bottom.
Fastmarkets has revealed that most producers insisted on higher prices for battery grade lithium carbonate, citing a lack of material, and are targeting more than 50,000 yuan (A$10,087) per tonne for January 2021.
This compares to the average prices in the fourth quarter of FY20 of 41,731 yuan (A$8,419) per tonne. The update highlighted that prices for lithium carbonate for delivery in the second quarter of 2021 could increase sharply due to tight availability and increased demand.
Tesla adding hype to lithium consumption
Tesla Inc (NASDAQ: TSLA) is very much the symbol of hope for the lithium industry. On Saturday, the US electric car company came close to meeting its 500,000 vehicle deliveries goal for 2020. Tesla has been ramping up output to meet rising global demand for battery-powered cars, with plans to build new factories in Austin, Texas and Brandenburg, Germany.
The Tesla share price soared more than 700% last year and set a fresh record all-time high on Monday of $729.77 per share.
ASX lithium shares waiting patiently
In Galaxy Resource's equity raising presentation on 25 November 2020, the company was optimistic for robust lithium demand in the mid-long term.
Galaxy sees global electric vehicle sales growing as high as 30% compound annual growth rate (CAGR) in the next decade. Its spodumene price forecast says that improved prices could come as early as 2021.
Electric vehicle sales have also shown a solid recovery towards the end of 2020 after a COVID-19 led disruption. Europe reported 99% year-on-year growth in September, while China neighbourhood electric vehicle (NEV) sales increased 113% year-on-year and 16% month-on-month in October 2020.
