Lithium is a valuable metal that is extracted from mines. It is specifically used in manufacturing the batteries found in electric vehicles and electronics. With the boom in the electric vehicles market, the demand for lithium has soared to a large extent in the past few years. Lithium is rightly called ‘white petroleum’ due to its extensive utility.
Lithium stocks are traded on the commodities exchange and are largely influenced by the demand and supply dynamics. Car manufacturers like Tesla and BMW, and smartphone manufacturers like Apple are creating robust demand; however, the supply is outpacing demand.
|SQM||Sociedad Quimica y Minera de Chile||$53.26||52.48%||15.3B|
|PWRMF||Power Metals Corp||$0.17||-5.56%||22.2M|
|LAC||Lithium Americas Corp||$27.83||200.86%||4.2B|
|ALTAF||Altura Mining Ltd||$0.01||-50.00%||#N/A|
|BYDDF||BYD Ord Shs H||$36.68||98.48%||998.8B|
|MLNLF||Millennial Lithium Corp||$2.96||164.29%||358.4M|
|NTTHF||Neo Lithium Corp||$5.07||634.78%||884.6M|
|PILBF||Pilbara Minerals Ltd||$1.62||478.57%||6.3B|
Factors to Consider Before Investing in Lithium Stocks
Investors must be aware of the demand and supply equation before investing in lithium stocks. It is worth considering that Earth’s crust has an abundance of lithium; enough to sustain the supply as required.
A new supply of lithium is expected to be added to the market from countries like Argentina and Chile by 2025. Additionally, the current market players, including Albemarle and Sociedad Quimica y Minera, are also increasing their production levels. As a result, lithium stock prices are not going up as expected.
Therefore, lithium stocks can work as excellent short-term investments. On the other hand, in the long term, the price of lithium stocks is expected to go down drastically.
Which Lithium Stocks Should I Buy?
We have compiled a list of the lithium stocks for your ready reference. You can select the suitable lithium stocks to invest in, based on your risk appetite, investment goals, and time horizon.
Investors must consider future prospects in addition to the present scenario. Currently, the demand for lithium is robust with the electric vehicles boom, and lithium stocks are soaring. However, based on expectations of oversupply in the coming years, lithium stock prices may drop significantly.