The Core Lithium Ltd (ASX: CXO) share price has soared in 2022, but will it keep climbing higher in 2023?
Core Lithium shares have surged 75% in the year to date. In today's trade, Core Lithium shares are surging 6%.
So what will impact the Core Lithium share price next year?
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Finniss Project
Core Lithium is exploring the Finniss Lithium Project in the Northern Territory. A key factor that could impact the Core Lithium share price is production from this project. The Mineral Resource Estimate for the Finniss project lifted by 28% to 18.9 Mt at 1.32% lithium oxide in 2022. The company says first spodumene concentrate production is on track for the first half of 2023. Core Lithium plans to commence lithium concentrate sales in H1 2023.
If Core Lithium can deliver on its production targets, this may be a positive for the company's cash flow and the Core Lithium share price. The team at Macquarie is tipping Core Lithium to deliver sold free cash flow in FY24 and FY25. Any new offtake agreements could also be a positive for Core Lithium.
Price of lithium
Lithium prices and electric vehicle (EV) demand could also weigh on Core Lithium shares. Lithium is an essential component of EV batteries. The price of lithium can impact investor sentiment about the company's ability to generate profit from lithium at the mine.
A recent Industry Department report is tipping spodumene prices to rise from an average of US$2,700 a tonne in 2022 to US$4,010 in 2023 before pulling back to US$3,130 in 2024. The report states world demand for lithium demand is "forecast to rise by over 40%" in the next two years to reach 1,091,000 tonnes by 2024. The report adds:
Despite the spread of new battery manufacturing capacity into Europe and the US, Asia remains the major source of demand for lithium.
Core Lithium share price snapshot
Core Lithium shares have soared 78% in the last year. However, Core Lithium shares have descended 21% in the last month
For perspective, the ASX 200 has lost 6% in the last year.
