Lithium stocks are gaining momentum, as hoped.
For one, as we said on August 27, “Lithium stocks were decimated over the last few weeks. But the pullback is overdone.”
Two, the supply-demand issue is only expected to get worse. According to CNBC, “The world could face a shortage for lithium as demand for the metal ramps up, with some analysts forecasting that it could come as soon as 2025.”
BMI, a Fitch Solutions research unit, was among those that predict a lithium supply deficit by 2025. In a recently published report, BMI largely attributed the deficit to China’s lithium demand exceeding that of its supply, they added.
Also, by the end of 2025, some analysts say we could see a deficit of 40,000 to 60,000 tonnes by 2025, and a wider deficit of about 768,000 by 2030.
In addition, according to Stellantis CEO Carlos Tavares, there’s not enough lithium to go around. And automakers are so concerned about supply for EV batteries, they’re racing to secure supply. For instance, Albemarle will deliver more than 100,000 tonnes of lithium hydroxide over a five-year period to support Ford EVs. General Motors invested $650 million into Lithium Americas.
Until demand starts to cool, stocks such as Albemarle (ALB), Livent (LTHM), American Lithium (AMLI), and Lithium Americas (LAC) could see higher highs, we added on Aug. 27.
In fact, since mentioning those trade ideas, ALB ran from about $190 to $198.49. LTHM ran from about $21.10 to $21.89. AMLI ran from about $1.25 to $1.57. And LAC ran from about $17.40 to $18.20 so far.
