The Allkem Ltd (ASX: AKE) share price is falling heavily on Tuesday.
In morning trade, the lithium miner's shares are down 10% to $14.64.
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Why is the Allkem share price sinking 10%?
The Allkem share price is tumbling on Tuesday after broad weakness in the lithium industry offset the release of the company's annual general meeting presentation and update on the Naraha operation.
Here's how other ASX lithium shares are performing this morning:
- Core Lithium Ltd (ASX: CXO) shares are down 10% to $1.68
- Liontown Resources Ltd (AX: LTR) shares have fallen 8% to $2.03
- Pilbara Minerals Ltd (ASX: PLS) share have dropped 8% to $4.85
Why are lithium shares falling?
The weakness being exhibited by ASX lithium shares today follows a poor night of trade for their US listed peers on Wall Street overnight.
The likes of Albemarle, Livent, and SQM all dropped into the red despite there being no news out of them.
Though, it is worth noting that the market has been charging higher since the release of a softer than expected inflation reading in the US last week. That sparked hopes that the US Federal Reserve would go easy with its interest rate hikes.
However, comments from the Federal Reserve's Chris Waller appear to have spooked investors. He warned that the market was overly optimistic and should brace for higher rates. This could have led to some investors reducing exposure to higher risk shares like lithium miners.
In addition, a surge in COVID cases in China dashed hopes of the reopening of the economy. Investors may believe this could impact demand for electric vehicles in the short term.
Allkem's updates
As mentioned above, today is the day of Allkem's annual general meeting and the company released a presentation ahead of the event.
That presentation contained no real surprises (positive or negative), with management reiterating its production growth targets and the expectation that demand for lithium will continue to grow materially.
In a separate announcement, Allkem and Toyota Tsusho Corporation (TTC) revealed that the Naraha Lithium Hydroxide plant in Japan has produced its first lithium hydroxide chemical product. Allkem has a 75% economic interest in Naraha.
Allkem CEO and Managing Director, Martin Perez de Solay said:
With our partner TTC, we have achieved a major milestone in successfully producing lithium hydroxide further delivering our vertical integration strategy and the diversification of our product offering. This facility is the first of its kind in the region and we have proven the technology of converting Olaroz technical grade lithium carbonate feedstock into lithium hydroxide. We have a first mover's advantage and will ultimately be supplying the high-end battery and cathode market.
