Pilbara Minerals Ltd (PLS), Arcadium Lithium plc (LTM), Core Lithium Ltd (CXO), Sayona Mining Ltd (SYA), and Mineral Resources Ltd (MIN) are witnessing substantial gains today.

ASX Lithium Shares Surge Amid Market Turmoil

This Wednesday, the S&P/ASX 200 Index (ASX: XJO) is down 0.2%, yet ASX lithium shares are unexpectedly rising.

What Is Driving ASX Lithium Shares Up?

Firstly, Mineral Resources confirmed support for its sale of a 49% stake in the Onslow Iron project, boosting investor confidence. This decision received the Australian Foreign Investment Review Board’s unconditional approval, translating to $1.1 billion in cash for the company.

Secondly, reports from the Australian Financial Review highlight a potential decline in Chinese lithium supply, with CATL pausing operations at two mines. Such news positively influences ASX lithium stocks, indicating limited supply could elevate prices.

Lastly, the short-selling landscape impacts these stocks. Pilbara Minerals leads the list of most shorted shares, with 20.4% outstanding shares in short positions. Sayona Mining is also heavily shorted, provoking potential short squeezes as prices rise.

Will ASX Lithium Shares Continue to Climb?

Regardless of the reasons, the surge in ASX lithium shares today is a remarkable event, delighting investors.

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