Atlantic Lithium share price unravels as headwinds remain

Atlantic Lithium (LON: ALL) share price has been unraveling in the past few months as lithium prices plunge. The stock dropped to a low of 16.64p on Wednesday, the lowest level since November 2021. It has plunged by more than 73% from the highest level on record.

Lithium prices are falling

Atlantic Lithium is an exploration and mining company focused on West Africa’s lithium industry. The firm, which is listed in London, is aiming to be a leading player in a metal whose demand is expected to keep rising in the next decades.

Recently, however, lithium price has dropped sharply even as more auto companies embrace electric vehicles. Data by TradingEconomics shows that lithium was trading at 264,500 CNY, down from a 12-month high of over 600k CNY.

This decline happened as the biggest lithium-producing countries like Indonesia and Australia boosted supply. As a result, analysts believe that lithium will have a surplus this year. As a result, most lithium stocks like Livent, Lithium Americas, and Core Lithium have dropped this year.

Atlantic Lithium share price has underperformed other lithium stocks because it is not yet in the production stage. It also dropped because of the policy changes in Ghana, where its biggest reserves are. The cash-strapped Ghanaian government recently published the Greeen Minerals Policy which includes mining royalty rates.

The company also said that it was confident of getting a mining license in the country, a few months after Blue Orca alleged that the firm received a license through bribes.

Atlantic Lithium share price forecast

ALL stock price has been in a freefall for months. It has dropped sharply after peaking at 68 pence. This week, the shares dropped below the key support at 19.56p, the lowest level on March 8th.

The stock also flipped the important support at 29.50p into a resistance. This was an important price since it was the lowest level on July 22nd and October 22nd. It has also dropped below the 50-day and 25-day volume-weighted moving averages. 

Atlantic Lithium share price has also moved below the descending trendline that connects the highest levels since December. Therefore, the path of the least resistance for the stock is downwards, with the next support level being at 15p. A drop below 15p will open the possibility of it dropping to 10p.