Imagine the batteries in your smartphone or your friend’s electric scooter. They’re likely powered by lithium, a lightweight metal that’s crucial for making rechargeable lithium-ion batteries. These batteries are everywhere these days – in phones, laptops, electric cars, and even some renewable energy storage systems. So, the companies that mine lithium and process it into a form that can be used in batteries make up what we call the “lithium sector”.
Now, when we say “lithium stocks“, we’re talking about shares of these lithium mining and processing companies that you can buy on the stock market. These stocks are kind of like tiny ownership pieces of these companies. When you buy these stocks, you’re basically betting that the demand for lithium will keep growing. And thus the company’s profits will grow, and so will the price of your stocks.
But, just like anything else in life, there are risks. Lithium prices can fluctuate based on supply and demand. If a new technology comes out that doesn’t need lithium, or if there’s too much lithium produced causing prices to drop, the value of your lithium stocks might fall. That’s why, even though the lithium sector has lots of potential due to the growing demand for batteries, investing in lithium stocks requires careful thought and research.
Lithium Stocks To Buy [Or Avoid] Now
Albemarle (ALB Stock)
Leading off, Albemarle (ALB) is a global producer of lithium and lithium derivatives, known for its significant role in the lithium market. Its operations span across several countries, including the U.S., Australia, and Chile.
On Monday morning, Albemarle announced they struck a key deal with Ford Motor Company (NYSE: F). In detail, this five-year contract, set to commence in 2026 and run until 2030, outlines Albemarle’s commitment to supply over 100,000 metric tons of battery-grade lithium hydroxide. This amount of lithium hydroxide is expected to be used in approximately 3 million future electric vehicles (EVs) manufactured by Ford.
Following this news release, shares of ALB stock closed Monday’s trading session up 1.15%, trading at $206.50 a share.
[Read More] 3 Cyclical Stocks To Watch In May 2023
Sociedad Quimica y Minera S.A. (SQM Stock)
Next, Sociedad Quimica y Minera S.A. (SQM) often referred to as SQM, this company is one of the world’s largest lithium producers, based in Chile. It operates in the Salar de Atacama, home to one of the planet’s richest lithium deposits.
Meanwhile, just today, Monday, Sociedad Quimica y Minera de Chile S.A., announced a strategic partnership with Ford Motor Company. This agreement aims to guarantee a consistent supply of high-quality lithium products, essential for the manufacture of electric vehicle batteries. In particular, SQM will be providing battery-grade lithium carbonate and lithium hydroxide to Ford, further enhancing the automaker’s capability to produce high-performance electric vehicles.
With this news release, shares of SQM stock closed Monday’s trading session slightly green on the day, trading at $71.15 a share.
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