Why is Lake Resources stock price plunging 6%?

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The share price of lithium miner ASX Lake NL Resources (ASX:LKE) is crashing today.

Lake Resources stock price is currently trading at $1.36, a decline of 6.21%. However, in earlier trading, Lake Resources’ share price plunged 8% before falling back. For perspective, the S&P/ASX 200 Index (ASX:XJO) is slipping 0.90% at the time of writing.

So why is Lake Resources stock price struggling today?

More lithium mines in production?

Lake Resources isn’t the only ASX lithium share having a tough day. The Core Lithium Ltd (ASX:CXO) stock price is down 5.16%, while the Allkem AG (ASX:AKE) the stock price slips 2.15%. During this time, the Liontown Resources Limited (ASX: LTR) the stock price is down 3.77% and the Limited mineral resources the stock price (ASX:MIN) is 3.01% in the red.

The fall comes after Credit Suisse analysts weighed more heavily on the lithium price outlook. Head of Energy Resources Research Saul Kavonic warned of a balanced lithium market, in comments to the ABC. Credit Suisse tipped lithium prices by half to $2,500 a ton, the publication reported. Kavonic added:

We could actually see the market return to equilibrium or even a surplus within the next 18 months. It was a situation we thought was unfathomable just a few months ago.

The analyst also noted that there are now more lithium mines in production. This could increase the supply. Kavonic said:

We have seen many new mines come into production, driven by high prices

Goldman Sachs also recently forecast a sharp correction in lithium prices last week, sending ASX lithium stocks plunging last Wednesday.

However, not all brokers agree. Macquarie analysts have a more optimistic outlook for lithium, predicting a “material valuation rise” on the ASX lithium stocks it covers.

Lake Resources was added to the ASX 200 index earlier this week as part of the June 2022 quarterly rebalancing.

Meanwhile, a similar lithium price trend was seen in the US overnight. lithium giant Lithium Americas CorpShares of (NYSE:LAC) fell 4.45% in US markets, while shares of Livent Corp (NYSE:LTHM) fell 3.16%. Meanwhile, Piedmont Lithium (NASDAQ:PLL) shares fell 3%.

Lake Resources Stock Price Overview

Lake Resources’ stock price has soared 413% in the past year and 35% since the start of the year. However, in the past month it has fallen by 18%.

To put things into perspective, the benchmark ASX 200 index lost almost 3% in one year.

Lake Resources has a market capitalization of approximately $1.83 billion based on its current share price.

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