Despite the current low price environment, the long-term demand for battery metals is robust and offers opportunity for those interested in lithium stocks.
Whatever the reason, it’s important to get familiar with the lithium market before investing in lithium stocks. Here’s a brief overview of some of the basics, including supply and demand, prices and companies.
Lithium is found globally in hard-rock deposits, evaporated brines and clay deposits. There’s some contention as to which type of deposit is superior, but generally there are tradeoffs for any option.
Technical-grade lithium is used in ceramics, glass and other industrial applications, while battery-grade lithium carbonate and lithium hydroxide, which are much more expensive, are used to make lithium-ion batteries. These lithium products can also be used for technical applications in a pinch. Those aren’t the only classifications, though. Pharmaceutical grade lithium carbonate is used in medicine.
Getting a look at lithium prices isn’t easy, and that can make it difficult for investors who are looking to assess the viability of a given project. Pricing in the lithium industry has always been opaque due to the dominance of a few major producers, with investors having very little pricing information they can trust.
Simon Moores of Benchmark Mineral Intelligence has emphasized that pricing can be a difficult concept for investors to grasp.
There are also distinct prices for lithium on markets in different regions, meaning lithium hydroxide in China will be priced slightly different than in Europe.
For those looking to invest in lithium who want to learn about lithium prices, it’s best to read reports on lithium price trends from experts to help you understand what is happening in the market.
A major driver for the lithium market is its use in the lithium-ion batteries that power electric vehicles, smart phones and laptops.
So what’s the best way to invest in lithium? How should investors interested in lithium stocks begin? To start, it helps to understand the lithium production landscape.
However, the list of the world’s top lithium-mining companies has changed in recent years. The companies mentioned above still produce the majority of the world’s lithium, but China accounts for a large chunk of output as well. As already discussed, the Asian nation was the third largest lithium-producing country in 2023.
This is an updated version of article originally published by the Investing News Network in 2015.
Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.
Leave a Reply