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The Lake NL Resources (ASX: LKE) The stock price climbed 13.93% today and is now trading at $2.29, after hitting an intraday high of $2.36.
Lithium carbonate prices fell on higher production in China year-over-year and month-over-month in March, Trade Economics Reportsbut are still good for the year.
“[C]Arbonate prices have jumped 74% year-to-date as rising energy prices have boosted the appeal of transitioning from fossil fuels, adding to growing demand for electric vehicles,” indicates the report.
“After growing 157 percent to 3.2 million units in 2021, China’s electric vehicle sales are expected to surpass five million in 2022,” he added.
With electric vehicles at the forefront of the lithium push, it doesn’t look like demand for the battery metal is about to slow down either, even though prices have recently fallen.
Why is the Lake Resources stock price rising then?
As lithium prices recently fell for the first time in more than 12 months, Lake Resources’ share price headed the other way.
It gained 141% in just over a month and is now up 127% year to date. The most recent growth catalyst is Lake’s signing of an agreement to remove up to 25,000 tonnes per annum (tpa) of lithium carbonate from the Kachi project in Argentina.
With this agreement and others in place, Lake hopes to reach production capacity of 100,000 tonnes of lithium by 2030.
Bell Potter analyst Stuart Howe was immediately impressed with the latest move and urged customers to buy on a speculative note.
BP values the business at $2.83 a piece, noting that Lake has “strategic appeal” in a recent note to clients. The broker is joined by seven other analysts – 100% coverage – advocating to buy now, according to data from Bloomberg.
The consensus price target for this list is $2.47 each, offering upside potential of 8% if analysts are right.
Over the past 12 months, Lake Resources’ stock price has soared more than 600% and is now up 48% in the last month of trading, despite falling lithium prices.