You can trade physical lithium, but this comes with hurdles like storage, transport, and security. Global X Lithium & Battery Tech ETF strives toward investment outcomes that correspond to the price and yield performance of the Solactive Global Lithium Index. Kyle Kroeger, esteemed Purdue University alum and accomplished finance professional, brings a decade of invaluable experience from diverse finance roles in both small and large firms. An astute investor himself, Kyle adeptly navigates the spheres of corporate and client-side finance, always guiding with a principal investor’s sharp acumen.
Investments in lithium mining companies and ETFs could prove profitable, but the price is prone to volatile fluctuations and the extraction process is expensive and time-consuming. Therefore, determine the risk and reward potential of any security influenced by the price of lithium. Lithium stocks are publicly traded companies involved in mining, processing or working with lithium, a critical material for manufacturing batteries used in laptops, cell phones and electric vehicles (EVs). With demand for all of these products surging, so is the demand for lithium. As lithium prices have taken a step back over the last year, so have shares of Albemarle Corporation stock. That said, ALB remains the largest and perhaps the most prominent option for lithium investors as it boasts the biggest market value of any publicly traded stock in the U.S. with a focus on this battery metal.
Top 10 Countries for Natural Gas Production (Updated
Soaring demand for a material used in manufacturing doesn’t automatically equate to higher sales and profits for a company. Supply also plays a hand in the market price of the basic material, so when supply outpaces demand, prices fall — and the material producer’s sales can fall, too, even if demand is expanding. It’s used to manufacture batteries, notably for electric vehicles (EVs), so many investors feel optimistic about companies that produce and refine the basic material.
The future will be powered by lithium, a metal that is the key ingredient for making lightweight, power-dense batteries used in next-gen technology like electric vehicles, otherwise known as EVs. As you know, the lithium industry has such an optimistic projection because of the expected growth of the battery industry, especially as it relates to electric vehicles. While it is unlikely that a new industry will suddenly take over EVs, new or young industries may become giant markets. Determine how much volatility you can tolerate and build a portfolio based on these parameters before you buy lithium stock. Next, since it’s a volatile commodity, be careful not to devote too much capital to lithium investments.
Best Lithium Stocks Of August 2024
This means you are trading OTC, with an average daily volume of only a few thousand shares. Based in China, Ganfeng Lithium Group operates globally, with mining interests from South America to Africa to Australia. Although it was only founded in the year 2000, the company has rapidly grown to become a leader in lithium production worldwide. But this is not to say that lithium will be replaced anytime soon—as of now, the potential substitutes that could replace lithium’s role in batteries are not yet viable because they do not work as efficiently as lithium.
Power tools, personal care items (trimmers and toothbrushes, etc.), and toys are also expanding markets heavily reliant on lithium. Thinking big like this and evaluating the entirety of the lithium industry will bring new and exciting possibilities to your general interest in getting in on the lithium industry. The company also made some management changes recently, with Caio Araujo tapped as the new chief financial officer in August, while Brian Talbot left his role as chief operating officer in late September.
Lithium prices are notoriously fickle since a global spot price is difficult to agree on. As a result, futures trading is always risky, even with less volatile commodities like gold or oil. Lithium prices fluctuate wildly, so novice investors likely won’t want to dive into futures.
Could the Silver Price Really Hit $100 per Ounce? (Updated
You’ll need to decide the best way to manage risk when investing in lithium company stocks or derivatives. Only invest in options or futures contracts if you have experience with derivatives. Although lithium atoms exist all over the world, the pure element itself is unstable and more difficult to find. And with the growth of specific industries like electric vehicles, you can expect the world’s the times and the sunday times reliance on lithium to continue growing.
- But despite the ramp-up in usage and value, lithium remains a volatile and controversial mineral for investments.
- Power tools, personal care items (trimmers and toothbrushes, etc.), and toys are also expanding markets heavily reliant on lithium.
- This expansion has been driven by organic growth as well as aggressive acquisitions and joint ventures.
- Legacy automakers have big plans to electrify their vehicle lineups in the coming years, which means millions of new EVs could be sold.
- As lithium prices have taken a step back over the last year, so have shares of Albemarle Corporation stock.
The analyst has an Outperform (Buy) rating with a price target of $48 on the stock, implying an upside potential of 87.6% at current levels. Earlier this year, the company announced the commissioning of the Dense Medium Separation module of its Greentech production plant and commercial production of battery grade lithium concentrate began April of this year. Allkem (OROCF, $5.80) is a specialty lithium chemicals company headquartered in Buenos Aires, Argentina. Of course, smaller lithium stocks are worth watching too — to find out which ones are currently thriving, check out our top lithium stocks article. You can also check out our articles on the biggest Australian stocks, top performing Australian lithium stocks, and top Canadian lithium stocks.
Her sole objective is to help investors make better and informed decisions. Her core competency lies in analyzing stocks across different sectors, from technology to mining, and banking to oil and gas. She holds a postgraduate degree in finance from ICFAI Business School, Pune, and is currently on her way to becoming a Certified Financial Planner. As the demand for lithium continues to ramp up and cause higher prices, analysts maintain their belief that OROCF is one of the best lithium stocks out how to buy sologenic there.
OROCF has plans to ramp up its lithium production threefold by 2026 and intends to maintain its 10% share of the global lithium market on an international basis over the next 10 years. Still, there are plenty of positive catalysts for lithium stocks, including the Inflation Reduction Act (IRA). One of South America’s top basic materials and chemical companies, Sociedad Quimica y Minera (SQM) is one of the world’s largest producers of lithium used in batteries and other energy storage technologies. Like any basic materials and metals investment, betting on lithium isn’t for the faint of heart.
LITHIUM SUPPLY
Though modest in size, Pilbara is a bit more difficult to research given that it trades over the counter and lacks analyst coverage in the United States. Nevertheless, average daily trading volume is better than others on this list, with more than 125,000 shares traded daily. In the United States, Mineral Resources is another stock that is thinly traded via an over-the-counter, or OTC, listing. That means liquidity is much lower for this stock, with an average volume of only about 2,000 shares traded each day, so investors should place their orders with care. The company has recently been a government target because of its scale, with officials posturing last year and saying they would nationalize the lithium industry in Chile.
That is why a good first step in any investing situation is to set aside the amount of money you elongate crypto how to buy will invest ahead of time. MarketBeat keeps track of Wall Street’s top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. Profit and prosper with the best of Kiplinger’s advice on investing, taxes, retirement, personal finance and much more.
Compared to lead-acid batteries, which is an older technology, lithium-ion batteries offer several advantages. Lithium-ion batteries typically have up to 6x higher energy density, nearly 2x longer charge and perform better in cold weather environments,5 making them ideal energy storage solutions. Automakers and battery manufacturers accelerated investment in EVs during the pandemic but then pulled back as relatively high interest rates constrained auto sales, including EVs. The resulting oversupply of lithium caused the lithium price to fall through 2023 and into 2024. Founded in 1993, The Motley Fool is a financial services company dedicated to making the world smarter, happier, and richer.
Smartphones, tablets, laptops, and now electric cars all rely on lithium-ion batteries to work. If you have ever checked a bag at the airport, you probably heard them warn you about removing your lithium-ion batteries. Lithium is an alkali metal (symbol Li on the periodic table) that manufacturers use in many applications, including glass/ceramic production, metallurgy, and medicine.
No matter what level of unique research you are willing to put in, at the end of the day, following general investment advice will work for you. Investing in lithium does not have to limit yourself to the metal or focus only on one specific aspect of its production. It’s essential to have the patience and composure to observe your investment’s growth and decline without reacting excessively to short-term fluctuations. Losing your investment, although unfortunate, shouldn’t be a significant setback if you’ve already accepted the possibility of losing that money.