How to buy lithium

This may influence which products we review and write about (and where those products appear on the site), but it in no way affects our recommendations or advice, which are grounded in thousands of hours of research. Our partners cannot pay us to guarantee favorable reviews of their products or services. We believe everyone should be able to make financial decisions with confidence. Jeff Reeves is a veteran financial journalist with extensive capital markets experience, and has written about Wall Street since 2008. His commentary has appeared in numerous respected outlets including CNBC, the Fox Business Network, USA Today, MarketWatch, US News, Kiplinger, and CNN Money, among others.

How to buy lithium

Please note that the stocks above were selected by an experienced financial analyst, but they may not be right for your portfolio. Before you decide to purchase any of these stocks, do plenty of research to ensure they are aligned with your financial goals and risk tolerance. The returns of all other stocks look downright pathetic when compared with Sigma Lithium, a Canadian company that has brought investors a better than 3,000% return over the past three years.

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Of course, smaller lithium stocks are worth watching too — to find out which ones are currently thriving, check out our top lithium stocks article. 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 2022.

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Mid-cap lithium stock Mineral Resources Limited is a global materials company headquartered in Australia with a portfolio that includes iron ore mining and logistics services in addition to its robust lithium output. Analysts estimate that global lithium production was 737,000 tons in 2022, with expectations for 2023 production at 964,000 tons and 1.17 million tons in 2024. The future will be powered by lithium, a metal that is the key ingredient for making lightweight, power-dense batteries. Electric vehicles (EVs) depend on lithium batteries, and EV sales are seeing massive annual growth. It reported a remarkable increase in its supply capacity, exceeding 100,000 tonnes, and expects to produce 600,000 tonnes by 2030.

Step 2: Create a brokerage account

Finally, you can invest in lithium directly through the commodities market with futures and options. With these derivatives, as this type of security is known, you can literally buy and sell access to lithium as a material. However, it is important to note that the commodities market is extremely volatile and extremely risky. This is not a good market for inexperienced investors and you should only participate if you fully understand the costs and risks. 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.

Adding to the bullish case for lithium stocks is the Inflation Reduction Act (IRA). Benchmark also releases broader global-weighted average prices for lithium carbonate and lithium hydroxide, plus a lithium price index, all on a monthly basis. To help lessen wild swings in value, consider buying a lithium ETF such as the Global X Lithium & Battery Tech ETF (LIT -0.62%) or invest in a basket of lithium stocks such as the ones listed above. Given the ups and downs in lithium production, keep any investment in this niche of the mining and chemicals industry small, and stay focused on the long term. 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. Forbes Advisor has identified the best lithium stocks available on the market today.

ETF Prices As of 07/19/23

Analysts forecast 2023 full-year earnings dropping marginally to $12.97, while sales edge up to $10.9 billion. If the cartel were to be created, it could mean higher costs for lithium. This would then be passed down to EV buyers and potentially curb electric vehicle demand, according to Yu. The world is dependent on the Democratic Republic of Congo for supply of the rare mineral, which makes it unpredictable and highly susceptible to political risks. Kinshasa is aware of the critical role its mines now play in the market for battery metals and last year it labelled cobalt a “strategic” substance in order to justify tripling mining royalties. Sales may be growing globally, but they are also modest when compared with the total fleet of cars on the roads.

How to buy lithium

But while we may not have expert forecasts, we do have an outlook for continued profitability from the company going forward. Titan will ask you about your goals, financial situation, and risk tolerance to produce a recommendation that’s customized to you. With Titan, you can invest in actively-managed stock and crypto portfolios, as well as in alternative asset classes like Real Estate, Private Credit, and Venture Capital.

How is LAC stock valued?

Galaxy Resources’ Australian segment operates the Mt Cattlin spodumene mine in Western Australia, and in 2016, it merged with its partner, General Mining Corporation. The Argentinian segment operates the Sal de Vida lithium brine project, which is located in an area that produces more than 60% of global lithium supply. Lithium Americas LAC stock has struggled in 2023 as lithium prices have pulled back, but Morningstar expects strong demand growth ahead for the metal, driven by increasing electric vehicle sales. At its current price, we think Lithium Americas is one of the best stocks to buy now in the EV supply chain.

The Biden administration’s Inflation Reduction Act (IRA) includes billions of dollars in EV incentives. A strong piece of that support encourages domestic U.S. lithium operations, in an effort to loosen China’s stranglehold on lithium processing. The foreign ministers from the three countries also hoped to have Australia, the world’s top lithium producer, join the cartel, Brazil’s Rio Times reported. Despite this setback, Scotiabank analyst Ben Isaacson is bullish about LAC and believes it «has all the ingredients to outperform its peers in 2023.»

And Blanchard has forecast a 14% dividend return for the stock in 2023. The analyst has a Buy rating and a price target of $95 on the stock, implying upside potential of around 13%. Moreover, the company is in the process of expanding its lithium hydroxide production capacity in Chile to 100,000 metric tons from 40,000 metric tons earlier, which will require an investment of $360 million. The final component of growing lithium demand is its use in consumer electronics such as laptops and cellphones. ETFs, or exchange-traded funds, are investment funds that focus on a particular investment theme or type of company. They pool funds from many investors like mutual funds do, but they’re typically less expensive, and your buy and sell orders are executed immediately when you place them while the market is open.

How to buy lithium

In the U.S., the 2021 Infrastructure Investment and Jobs Act set aside $5 billion in federal funding for EV charging stations. More recently, the 2022 Inflation Reduction Act was put into place to provide credits for consumers to support President Biden’s goal of getting EVs to account for 50 percent or more of new auto sales by 2030. With automakers on board, there will be ample demand for lithium in the years ahead.

Step 4: Analyze Lithium Americas stock

«We see a price inflection in 2023, as decelerating demand growth will ease market tightness. However, a longer-term lithium supply shortfall could slow the EV transition. Indeed, even Piper Sandler’s top-rated analyst, Charles Neivert, is bullish about ALB stock, with a Buy rating and a price target of $330 on the stock. «We believe lithium markets will remain in deficit for the near and medium term before moving into structural deficit long-term,» says Shaw. These risks often are heightened for investments in emerging/ developing markets or in concentrations of single countries. Raw lithium from ores and brines gets processed and refined into lithium compounds, which become inputs for manufacturing batteries. The processing and refining are performed by lithium compound manufacturers, which are positioned to benefit as demand for lithium increases and more raw lithium needs refining.

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With an atomic number of 3, it sits right below hydrogen in the first column of the periodic table. Also, it means it is an alkali metal, and as such, it is highly reactive and flammable. Going forward, its foothold in that market will become stronger as electrified vehicles become increasingly popular. GNENF stock could be ideal for those looking to capitalize on these developments. SLI’s novel method of lithium extraction has the potential to revolutionize the industry, making an otherwise painstaking process take a fraction of the time. Whether you’re keen to dip your toe or dive headfirst into this market, this ETF is worth considering.