Why the Orocobre (ASX:ORE) share price is surging

The Orocobre Limited (ASX: ORE) share price jumped 7.4% yesterday as demand for global lithium continues to grow in April.

| More on:
Row of lithium batteries

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Orocobre Limited (ASX: ORE) share price is one to keep a close eye on right now. Shares in the Aussie lithium chemical producer jumped 7.4% higher yesterday and are now up 20.1% in 2021 alone.

Why is the Orocobre share price surging right now?

It usually pays to look at ASX announcements when shares are on the move. For Orocobre, however, there have been no major announcements since its half-year results released on 26 February 2021.

Orocobre reported significant cost reduction for the half-year ended 31 December 2020 with the cost of sales coming in at US$3,777 per tonne thanks to increased operational efficiency.

Production levels fell 9% to 6,079 tonnes due to coronavirus restrictions while sales soared 21% higher to 7,738 tonnes. Heightened focus on the electric vehicle market has put lithium producers like Orocobre back in the spotlight after years of weakening market conditions.

The Orocobre share price has soared 139.7% higher in the last 12 months compared to a 33.1% gain for the S&P/ASX 200 Index (ASX: XJO).

One of the biggest factors driving Orocobre's valuation higher is macro rather than micro. Global lithium prices have been surging and are approaching a 2-year high. This comes as the electric vehicle push gains momentum around the world from producers, consumers and regulators.

March 2021 saw a particularly strong period for lithium prices. That helped propel the Orocobre share price towards its current $5.37 per share level.

It's not just Orocobre that is experiencing gains. Australia has a number of large lithium companies including Galaxy Resources Ltd (ASX: GXY) and Pilbara Minerals Ltd (ASX: PLS).

All three of these lithium producers have been surging in value with strong support for the electric vehicle movement from US President Joe Biden and a growing frenzy around Tesla Inc (NASDAQ: TSLA) shares in the last 12 months.

Foolish takeaway

Anytime an ASX 200 share surges 7.4% in one day, it's worth keeping an eye on. The Orocobre share price has performed strongly in 2021 and is now just 12.8% shy of a new 52-week high.

Should you invest $1,000 in Steadfast Group Limited right now?

Before you buy Steadfast Group Limited shares, consider this:

Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Steadfast Group Limited wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

And right now, Scott thinks there are 5 stocks that may be better buys...

See The 5 Stocks *Returns as of 30 April 2025

Motley Fool contributor Ken Hall 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 Bruce Jackson.

More on Share Market News

Person pretends to types on laptop drawn in sand.
Share Gainers

Here are the top 10 ASX 200 shares today

ASX investors had a rough start to the week today.

Read more »

Happy man working on his laptop.
Broker Notes

Leading brokers name 3 ASX shares to buy today

Here's why brokers believe that now could be the time to snap up these shares.

Read more »

Two funeral workers with a laptop surrounded by cofins.
Broker Notes

Macquarie just forecast this ASX 300 dividend share could surge 37%. Here's why

Atop its passive income payouts, Macquarie expects this ASX dividend stock could leap 37% in a year.

Read more »

A person in a gorilla suit leaps really high holding a banana, nearly doing the splits.
Share Gainers

Up 1,238% in a year, why is this ASX gold stock surging again on Monday?

The ASX gold stock is now well into ten-bagger range and still rising fast today.

Read more »

A happy investor sits at his desk in front of his laptop and does the mexican wave with his arms to celebrate the returns from his ASX dividend shares
Share Gainers

Why EOS, Gorilla Gold, Lendlease, and OFX shares are charging higher today

These shares are starting the week on a positive note. But why?

Read more »

A young male investor wearing a white business shirt screams in frustration with his hands grasping his hair after ASX 200 shares fell rapidly today and appear to be heading into a stock market crash
Share Fallers

Why Appen, DroneShield, Gentrack, and New Hope shares are dropping today

These shares are starting the week in the red. But why?

Read more »

An unhappy man in a suit sits at his desk with his arms crossed staring at his laptop screen as the PointsBet share price falls
Materials Shares

Does Macquarie rate James Hardie shares a buy, hold or sell?

The company is set to report FY25 earnings this week.

Read more »

A man looking at his laptop and thinking.
Industrials Shares

Which ASX 200 industrials stock does Macquarie expect to sink 40% over the next 12 months?

Can this name build it's way out of such negative sentiment?

Read more »