The Core Lithium Ltd (ASX: CXO) share price is down more than 14% this week, but could it leap higher in 2023?
In today's trade, Core Lithium shares are down 4.51%, currently fetching $1.017 apiece. For perspective, the S&P/ASX 200 Index (ASX: XJO) is 0.11% lower in lunchtime trade.
So what could drive Core Lithium shares higher in 2023?
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Spodumene concentrate production
Core Lithium's ability to deliver on the on-site production of spodumene concentrate may impact investor sentiment this year.
In early January, Core Lithium advised of its maiden shipment of direct shipping ore (DSO) from its Finniss project in the Northern Territory to a customer in China at a price of $US951 per dry metric tonne.
Core Lithium is completing construction of a dense media separation (DMS) plant on-site at the Finniss project to produce higher-quality spodumene concentrate.
Construction of the plant is on track for commissioning in the first quarter of 2023, with first concentrate slated for the first half of 2023.
News on this production may well provide a boost to the Core Lithium share price.
Lithium and EV demand
Any lift in demand for lithium and electric vehicles (EV) could also spur the Core Lithium share price in 2023. Lithium prices impact the earnings for the company from any production from the mine. A lift in EV demand can increase the lithium price.
In December, the Office of the Chief Economist predicted spodumene prices to rise from US$2,700 a tonne on average in 2022 to US$4010 in 2023. However, these prices are predicted to drop back in 2024 to US$3,130. Any rise in the lithium price could be a positive for Core Lithium shares in 2023.
On the flip side, Goldman Sachs has recently predicted lithium carbonate and lithium hydroxide prices to slide in 2023 and 2024. Goldman predicts lithium carbonate will drop from US$66,750 a tonne to US$53,300 in 2023. For lithium hydroxide, Goldman forecasts the price to slide from US$76,650 a tonne to US$58,650 a tonne in 2023.
Offtake agreements
Core Lithium's ability to sign new offtake agreements for spodumene concentrate from Finniss could also weigh on its share price. In 2022, Core Lithium signed a binding term sheet with Tesla to supply spodumene from the Finniss project. However, the deal fell through in late October. At the time, Core Lithium advised it will maintain an open and ongoing dialogue with Tesla.
With further lithium spodumene concentrate production touted for the first half of the year, any new offtake agreements with global EV manufacturers could give the Core Lithium share price a lift.
Core Lithium already has offtake agreements in place with China's Ganfeng Lithium and Yahua. Commenting in November on its future plans, Core Lithium said it is "developing market strategy to address strong interest from converters, vehicle manufacturers as well as options for conversion facilities (including JVs)".
Core Lithium share price snapshot
The Core Lithium share price has climbed 17% in the past year. However, Core Lithium shares have fallen around 3% in the last month.
Core Lithium has a market capitalisation of about $1.9 billion based on the current share price.
