Why are Allkem shares down 11% in November?

This lithium miner's shares were out of form this month.

| More on:
A woman screams and holds her hands up in frustration.

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

It has been a tough month for Allkem Ltd (ASX: AKE) shares.

Although it is on course to record a small gain today, that doesn't change much on a monthly basis.

For example, if things stay the same way, the lithium miner's shares will record a November decline of 11%.

Why were Allkem shares sold off in November?

Investors have been hitting the sell button this month after lithium prices continued to fall.

For example, according to data from Goldman Sachs, the lithium carbonate price was fetching US$19,542 per tonne on 3 November. Whereas at the weekend, it was trading 12.6% lower at US$17,076 per tonne.

It was even worse for spodumene (6%), which was commanding a price of US$2,010 per tonne on 3 November, but at the weekend was down 21.3% to just US$1,580 per tonne.

These prices are a long way from the averages of 2022 when lithium carbonate was going for US$59,868 per tonne and spodumene (6%) was fetching US$4,368 per tonne.

Broad weakness in the industry

As you might imagine given the decline in lithium prices, it isn't just Allkem shares that have suffered this month.

Elsewhere in the industry, Core Lithium Ltd (ASX: CXO) shares are down 25% this month, Liontown Resources Ltd (ASX: LTR) shares have lost 15% of their value, and Sayona Mining Ltd (ASX: SYA) shares are down almost 20%.

Is this a buying opportunity?

The team at Goldman Sachs believes Allkem shares are great value at current levels if you're brave enough.

Despite being bearish on lithium, the broker has a buy rating and lofty $10.90 price target on its shares. This implies a potential upside of 28% for investors over the next 12 months.

It said: "We continue to prefer low-cost assets of scale into lithium price declines (Buy IGO for FCF/ AKE for growth)."

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the 'five best ASX stocks' for investors to buy right now. We believe these stocks are trading at attractive prices and Scott thinks they could be great buys right now...

See The 5 Stocks *Returns as of 30 April 2025

Motley Fool contributor James Mickleboro has positions in Allkem. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group. 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 Scott Phillips.

More on Materials Shares

Miner and company person analysing results of a mining company.
Materials Shares

Fortescue shares fall on Iron Bridge blow

Iron Bridge is taking longer to ramp up than planned.

Read more »

Three miners looking at a tablet.
Materials Shares

Buy Rio Tinto shares for a 23% return

Let's see which broker is tipping this mining giant as a top buy.

Read more »

A bricklayer peers over the top of a brick wall he is laying with a level measuring tool on top and looks critically at the work he is carrying out.
Materials Shares

Brickworks shares have surged 15% in a month. Are they still good value according to Macquarie?

Here's what this broker has to say about the stock.

Read more »

A man checks his phone next to an electric vehicle charging station with his electric vehicle parked in the charging bay.
Materials Shares

Are Pilbara Minerals shares too cheap to ignore?

A leading broker has given its verdict on this beaten down lithium miner.

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 »

Man with rocket wings which have flames coming out of them.
Materials Shares

Why is the Core Lithium share price jumping 19% today?

Something is getting investors excited. Let's find out what it is.

Read more »

A woman holds up hands to compare two things with question marks above her hands.
Financial Shares

Which is better value right now, Soul Patts or Brickworks shares?

Let's dive in and see what the experts have to say.

Read more »

A smiling businessman in the city looks at his phone and punches the air in celebration of good news.
Materials Shares

Core Lithium shares charge higher on big news

This lithium miner is starting the week strongly. But why?

Read more »