Why has the Core Lithium share price rocketed 50% in a month?

What's driving Core Lithium shares higher lately?

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Key points
  • Core Lithium shares leapt almost 50% in a month as investors rallied behind the company 
  • The number of short positions in the company's shares has reduced to 5.6% as of last week
  • The Core Lithium share price is up 324% since this time last year

What a month it's been for Core Lithium Ltd (ASX: CXO) shareholders.

After touching a low of 90 cents on 18 July, the ASX lithium producer's shares rebounded to a record high of $1.665 on Tuesday.

Despite some retracement, the Core Lithium share price is still up by 47.3% in a month, after its shares closed on Friday at $1.40.

Let's take a look at what's been driving the company's shares lately.

A happy miner pointing.

Image source: Getty Images

Core Lithium shares continue to surge

In mid-July, short bets against the sector were at their highest as economists forecasted a gloomy economic outlook. By 18 July, more than 8% of Core Lithium shares were being shorted.

However, a recent recovery in the market has prompted investors to close on their positions, which is positively impacting the Core Lithium share price.

Last week, the Australian Securities & Investments Commission (ASIC) released its short position report. It revealed that around 5.6% of Core Lithium shares were held in short positions.

Furthermore, an uptick across the lithium sector appears to be supporting Core Lithium shares.

Shares in lithium rivals Lake Resources NL (ASX: LKE) and Liontown Resources Ltd (ASX: LTR) are also up 94% and 63% in a month, respectively.

Core Lithium provided an update on its exploration activities this week, highlighting its progress at the Finniss Lithium Project and Anningie-Barrow Creek Project.

The news drove its shares 9.86% higher at the time.

With the company targeting the first production of spodumene concentrate by the end of 2022, this could bode well for its share price in future.

Core Lithium share price summary

Over the past 12 months, the Core Lithium share price has continued its upward trend to post a 324% gain.

In comparison, the S&P/ASX 200 Materials Index (ASX: XMJ) sector is flat over the same time frame.

Based on today's price, Core Lithium commands a market capitalisation of roughly $2.42 billion.

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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