Lithium prices could push even higher.
All because the U.S. does not have the battery mining operations in place it desperately needs, according to Piedmont Mining CEO Keith Phillips. Sure, the Biden Administration wants to halve the number of gas-powered vehicles on the roads by 2030.
But, according to Phillips, “Yes, we’ll [eventually] have enough, but not by that time. There’s going to be a real crunch to get the material. We don’t have enough in the world to turn that much [lithium] production in the world by 2035.”
When every EV needs eight to 10kgs. of lithium, that’s a problem. Plus, “Growing demand has caused the price of lithium carbonate to nearly double this year alone, and the IEA projects demand to grow by 40 times in the next two decades, with a majority of that supply coming from outside of the U.S.,” added Yahoo Finance.
With demand showing no signs of slowing, with dwindling supply, some of the top stocks to consider include:
Piedmont Lithium (PLL)
Since July, shares of PLL accelerated from a low of about $32.50 to $62.37. From here, the stock could potentially challenge $70 again, near-term. Helping, the company just announced it selected Etowah, Tennessee as the location of the Company’s planned 30,000 metric ton per year LHP-2 lithium hydroxide operation.
With a planned completion and start of production in 2025, the Company believes Tennessee Lithium will be the largest lithium hydroxide processing facility constructed in the United States. The Project is expected to convert spodumene concentrate sourced principally from Piedmont’s international project investments to significantly expand the U.S. supply of lithium hydroxide, a key component in the manufacturing of EV batteries, as noted in a press release.
The last time we mentioned ALB on August 22, it traded around $265. It’s now up to $291, and could see $300 shortly.
In its second quarter, the company produced net sales of $1.48 billion, an increase of 91%; net income of $406.8 million, or $3.46 per diluted share; Adjusted diluted EPS of $3.45, an increase of 288%; Adjusted EBITDA of $610 million, an increase of 214%. Even better, it expects to see significant growth in full-year 2022 results including net sales of $7.1 – $7.5 billion (>2x 2021) and adjusted EBITDA of $3.2 – $3.5 billion (>3x 2021).
Deutsche Bank just raised its price target on ALB to $270 from $255. Credit Suisse raised its price target to $196 from $185.
Or, look at the Global X Lithium Battery Tech ETF (LIT).
The LIT ETF traded at $77 on August 22. While it pulled back to $72, it could race back to $77, and perhaps to $82 as the lithium story heats up again. Not only does this ETF offer great diversification, it does so at less cost. The ETF offers exposure to stocks, such as Albemarle (ALB), BYD Co. (BYD), LG Chem (LG), Tesla (TSLA), Livent Corp. (LTHM), Lithium Americas Corp. (LAC), Quantumscape Corp. (QS), and Piedmont Lithium (PLL) to name a few.
There’s also Livent Corp. (LTHM).
Since August 22, the LTHM stock raced from about $28 to $34.70 and could test $40.
The company is moving forward with its lithium hydroxide project in North Carolina, and its carbonate expansion in Argentina. It will also start a phase two carbonate expansion in Argentina with commercial production expected to begin by 2023. In addition, earnings have been solid. For the first quarter of 2022, company revenues were up 17% quarter over quarter to $143.5 million. Year over year, that’s up 56%. GAAP net income was 609% higher quarter over quarter at $53.2 million.
There’s also Lithium Americas (LAC).
Since June, the stock raced from $21 to $31.38. If it can now break above triple top resistance around $32, it could test $36 next. Not only is the company advancing its Cauchari-Olaroz mine in Argentina, it also expects to start construction at its Thacker Pass project in the U.S. this year.