In trading, over the last several sessions the Allkem (AKE) share price has fallen sharply, and the position reached our stop loss level of $13.00 in early trading this morning.
The AKE share price was as high as $16.50 on the 14th of November and the position was in profit by 11%. The fall in the AKE share price to the stop loss level looks to be related to market concerns that recent price increases for Lithium are unsustainable and China lockdowns.
The recent surge in COVID-19 cases in the Chinese manufacturing hub of Guangzhou has raised concerns that demand for lithium will slow. It is not so much that demand for electric vehicles and battery storage is going to stop but China is home to 60% of the world’s capacity for processing raw lithium into battery-grade chemicals. The shutdown of factories only for a short time could cause short-term supply problems.
At some point in the future, China like the rest of the world will have to lift lockdowns and learn to live with COVID-19, when this happens AKE is a company that we will consider buying back into. But for the moment time to exit.
TRADE ACTION
Closed position result
Number of shares: 500
Entry Price: $14.85
Exit Price: $13.00
Loss: $925.00
