The Lake Resources NL (ASX: LKE) share price is soaring 13.93% today and is now trading at $2.29, having earlier hit an intraday high of $2.36.
Lithium carbonate prices have eased thanks to heightened production in China year-over-year and month-over-month in March, Trading Economics reports, but are still well up for the year.
"[C]arbonate prices surged 74% year-to-date, as rising energy prices strengthened the appeal to transition away from fossil fuels, adding to the booming demand for electric vehicles," it says.
"After rising 157% to 3.2 million units in 2021, electric vehicle sales in China are expected to cross five million in 2022," it adds.
With electric vehicles at the forefront of the lithium push, it doesn't seem as if demand for the battery metal is set to slow either – even if prices recently fell.
Image source: Getty Images
Why is Lake Resources share price rising then?
While lithium prices recently crossed downward for the first time in over 12 months, the Lake Resources share price has been heading the other way.
It's gained 141% in little over a month and is now up 127% this year to date. The most recent growth catalyst is Lake's signing of an offtake agreement of up to 25,000 tonnes per annum (tpa) of lithium carbonate from the Kachi project in Argentina.
With that and other agreements in place, Lake hopes to achieve a production capacity of 100,000 tonnes of lithium by the year 2030.
Analyst Stuart Howe at Bell Potter was immediately impressed by the latest move and urged clients to buy on a speculative rating.
BP values the company at $2.83 apiece, noting that Lake has "strategic appeal" in a recent note to clients. The broker is joined by seven other analysts – 100% of coverage – advocating to buy right now, per Bloomberg data.
The consensus price target from this list is $2.47 apiece, offering a potential 8% upside if the analysts are correct.
In the last 12 months, the Lake Resources share price has spiked more than 600% and is now up 48% in the past month of trade, despite lithium prices easing off.
