Up 120% In 2020, Can The Lit Lithium Etf Hold Its Charge In 2021?

How To Invest In Lithium

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As the name suggestions, lithium is an essential material used in lithium-ion batteries, which play an increasingly important role in areas like electric vehicles and renewable energy storage. The growth of these industries and their dependence on batteries is driving unprecedented demand for lithium, causing lithium miners and battery producers to rapidly scale operations.

LIT offers efficient access to a broad basket of companies involved in lithium mining, lithium refining, and battery production. Year to date , however, both stocks have plunged as concerns have grown that lithium prices will drop considerably over the coming years. As of the close of trading on Thursday, Albemarle is down 25% since the beginning of the year, and SQM is down 21%, even as demand for the metal is surging. Investors should note that over the course of the ETF’s trading history, it has had a tendency to be heavily allocated to a small amount of stocks. The fund has also been volatile relative to the broader market, indicating it may not be the best choice for conservative buy-and-hold investors. Most direct plays in the lithium sector invariably involve mining stocks.

Tru Group Lithium Investor Due Diligence Checklist

Lithium has been the front-runner in the battery technology market for years, but that is all coming to an end. Elon Musk is against them, but Jeff Bezos is investing heavily in them. Hydrogen Fuel Cells will turn the battery market upside down and we’ve discovered the tiny company that is going to make it happen. Since the beginning of 2015, stocks in the battery sector have turned in performances ranging from negative 25% to positive 25%, in the least symmetrical way possible. Furthermore, such batteries are essential for renewable energy sources, specifically wind and solar. The need to store power for prolonged periods requires the kind of industrial-grade capacity that only advanced lithium batteries can deliver.

  • U.S. stock index futures climbed on Monday on optimism over a stimulus-fueled snapback in economic activity ahead of the Federal Reserve’s policy-setting meeting this week.
  • But extraction is complicated, so it’s expensive, dangerous and requires 500,000 gallons of water per ton of lithium.
  • The ever-increasing demand for storage capacity is leading some analysts to predict increases in lithium prices for the foreseeable future — which could mean an even bigger jump in lithium-mining companies.
  • Get to know an ETF’s objectives, holdings, and performance all in a quick summary.
  • The batteries Tesla uses for its Model S electric cars are Panasonic’s lithium-ion batteries made of lithium, nickel, cobalt and aluminum oxide.
  • FMC separated its lithium business to leave it focused on agricultural products.

Production is expected to start in 2024 with an annual output at 15,000 tonnes of battery grade lithium hydroxide, Sibanye said. Sibanye, the world’s largest source of platinum group metals , plans to focus on expanding into battery metals as it looks to capitalise on the global push for green technologies.

Amd Is A Stock To Buy On The Dip

There is another important point investors need to realize before getting involved with lithium stocks. Due to the metal’s abundance, relative to say gold or platinum, lithium is much cheaper than those metals. That means many companies that can be called “lithium stocks” are involved in the mining or production of other chemicals or metals. Conversely, because of the allure of precious metals, some companies only mine gold, silver or platinum. That’s also the year in which Albemarle expects to be free cash flow positive, aided in part by its unrelated high-margin businesses in catalysts and bromine. It should all combine to provide greater financial flexibility with respect to future growth and expansions. The company estimates that current investment plans would only utilize about 60% of its available resources — the majority of which are valuable rock deposits — by 2024.

Chile is home to over half of the world’s lithium reserves, with other major producers including Australia, Argentina and China. South America is more associated with brine deposits, while Australia is the leading producer of hard rock lithium. Global X Management Company LLC serves as an advisor to Global X Funds.

SQM produces lithium carbonate for use in lubricant greases, lithium batteries, and ceramic glass. Chile is home to Sociedad Química y Minera de Chile S.A., (Chemical and Mining Company of Chile Inc.), the largest lithium-mining company in the world. However, Argentina and Chile are the top destinations for producers that are looking to get in on the lithium game. As of 2016, Chile had the highest brine production in the world with 12,000 metric tons, followed by Argentina with 5,700 metric tons. If you haven’t jumped on this lucrative bandwagon just yet, there’s still time.

This is one reason why there is a growing consensus that hard-rock lithium operations are more suitable for supplying the electric vehicle market. There are many types of lithium and all of them are suited to different purposes. The two predominant types are lithium carbonate and lithium hydroxide. Lithium hydroxide is regarded as the premium product that is better for battery production .

What Are The Best Lithium Stocks To Watch?

The metric calculations are based on U.S.-listed ETFs that are classified by ETFdb.com as being mostly exposed to a specific industry. If an ETF changes its industry classification, it will also be reflected in the investment metric calculations. “We see spent lithium-ion batteries as a potent industrial mineral, and – as with any resource, we need the right team, technology, and infrastructure to extract and process it.

Just as importantly, long-range electric cars will cost less than $30,000 by 2023, as promised by Elon Musk. They are underpinned both by rapid growth in electric vehicle sales and tight supplies. Another second-tier lithium producer is Livent Corportion, which trades on NYSE under the ticker LTHM. While ALB and SQM are diversified companies, LTHM is mainly focused on battery-grade lithium. If there is an explosive EV boom, as forecasted, it could be one of the major beneficiaries too. Other small lithium producers include Orocobre, Pilbara Minerals, Galaxy Resources, Bacanora Lithium, and Lithium Americas.

Lithium: How To Invest In Wall Streets Hottest Market

That’s an important factor in region where elections can swing wildly among political parties. The stock is up 144% in the past 12 months, yet still trades at a P/E of 17.

I am dedicated to helping Gen X-ers and Boomers achieve financial security and prosperity through developing good money strategies. My work has been featured in US News & World Report, Investor’s Business Daily and Financial Advisor magazine. It’s not unusual for institutional owners to take some profits after a big run-up.

The energy density of the basic lead-acid battery in your car is 30 Wh/L. And the impact for the energy industry has made this “energy metal” a hot commodity. It’s helping power new technologies and the emerging trend is a great opportunity for investors. That’s why I jumped into the data and found three of the best lithium stocks for investors.

Up 120% In 2020, Can The Lit Lithium Etf Hold Its Charge In 2021?

That means even the most aggressive investors need to consider lithium equities as at least one way of getting exposure to the metal. With demand growing for products such as those and others, investors have a few ways to profit from increased lithium demand. Actually, it is the lightest metal and one of the least dense elements on the periodic table. Consumers know a little something about lithium because it is a primary ingredient in the batteries that power electric cars and cell phones. Lithium is also found in an array of consumer electronics devices such as smartphones and tablets. A major plus for PILBF is that its key mining project is near established infrastructure. That means it can get its products out to port and feed global demand when it returns.

how to invest in lithium

Westwater Resources, Inc. has projects in uranium, graphite, lithium, and vanadium. They have two lithium projects in the early stages of development – one in Utah and the other in Nevada. Ganfeng Lithium is a Chinese lithium refiner, primarily of spodumene from Mt Marion in WA. The intersection of Chile, Bolivia, and Northwest Argentina make up the region known as the Lithium Triangle. The Lithium Triangle is known for its high quality salt flats including Bolivia’s Salar de Uyuni, Chile’s Salar de Atacama, and Argentina’s Salar de Arizaro. The Lithium Triangle is believed to contain over 75% of existing known lithium reserves.

Lithium Americas (lac)

EnerSys is one of the stored energy solutions for industrial applications. They produce and distribute reserve power and motive power batteries, battery charges, power machines, battery accessories, and outdoor equipment enclosure solutions to consumers worldwide.

Coupled with volatility sparked by COVID-19, these scenarios are causing some investors to approach lithium with caution. Lithium plays an essential role across mobile technologies, with the demand for lithium-ion batteries poised to triple by 2025, according to an analysis by S&P Global. But investors should be wary of lithium’s delicate supply and demand levels before diving into this stock. Any data, charts and other information provided on this page are intended to help self-directed investors evaluate exchange traded products , including, but limited to exchange traded funds and exchange traded notes . Criteria and inputs entered, including the choice to make ETP comparisons, are at the sole discretion of the user and are solely for the convenience of the user.

Mining Companies

Contact Fidelity for a prospectus, offering circular or, if available, a summary prospectus containing this information. The performance data featured represents past performance, which is no guarantee of future results. Investment return and principal value of an investment will fluctuate; therefore, you may have a gain or loss when you sell your shares. Current performance may be higher or lower than the performance data quoted. A fund’s Overall Morningstar Rating is derived from a weighted average of the performance figures associated with its 3-, 5-, and 10-year Morningstar Rating metrics. Please see the ratings tab for more information about methodology. The car is slated to come out around the same time as Tesla’s Model 3 , and will have a similar battery capacity and price.

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