Shares in Liontown Resources Ltd (ASX: LTR) have pared gains in recent days and are now down 12% in the past week. That builds to a 20% drop in the past 8 trading days.
Despite no market updates, investors have been unloading Liontown shares. It now trades in line with 3-month averages, Bloomberg data shows.
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What's up with Liontown Resources shares?
While there's been no remarkable news from the company, noteworthy is that the price of lithium carbonate just took its first major backward step since December 2020.
Yes, that's 2020. Lithium carbonate has been on an extended vertical rally for almost 18 months now.
Prices struck an all-time high of 497,500 Chinese Yuan in late March, before heading sideways, and then trading 3% lower where it currently rests.
Lithium pricing had been touted as a key catalyst for Liontown's share price, notwithstanding the growth of company earnings as well.
In a Motley Fool article yesterday, major broker Macquarie weighed in on the lithium market and tipped its preferred ASX shares …"[they] think ASX lithium shares Allkem Ltd (ASX: AKE) and [Liontown] will outperform their peers".
Since March, prices of lithium and Liontown's share price have moved almost in unison, as seen on the chart below.
In the absence of any other market catalysts, it appears the pause in the lithium rally may have transcended over into the Liontown share price.
In the past 12 months, Liontown shares have surged more than 342% but dipped 60 basis points into the red this year to date.
