Lithium prices may finally be bottoming out, creating substantial opportunity for some of the world’s top lithium stocks to buy.
For one, Bank of America analyst Steven Byrne sees lithium prices averaging about $14,000 per metric ton, as noted by Barron’s. That’s up from a previous estimate for $10,000. For 2025, he says prices could reach $16,300 from prior estimates for $15,500.
Two, should we see a stronger green energy boom, and a global recovery in electric vehicle sales, lithium prices should explode even higher.
Three, analysts at Fastmarkets say demand for lithium in the U.S. could grow by 487% to 412,000 tonnes by the time 2030 rolls around. Should that happen, a shortage of supply coupled with explosive demand will lead to another massive spike in lithium. In addition, according to the United Nation’s Conference on Trade and Development, demand for metals, such as lithium are “on track” to outpace production through 2050.
The UN group also noted that “Lithium tops the list, with expected demand in 2045 more than tripling the likely supply in that year of nearly 1,400 metric tons.” That being said, investors may want to take advantage of the fear in lithium stocks to buy, such as:
Albemarle (ALB)
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Albemarle (NYSE:ALB) missed first quarter profit estimate with its latest earnings. But that’s to be expected when lithium prices plummet about 80%.
For the quarter, revenues were down 47% year over year at $1.36 billion from the $2.58 billion posted a year earlier. Adjusted EBITDA of $291.2 million was also well below the $1.76 billion posted last year. It adjusted profit of 26 cents was also below expectations for 27 cents.
Again, that’s not shocking with lithium prices off 80%. However, with lithium showing signs of finally bottoming out, the future may be a bit brighter for the industry’s 800 lb. gorilla.
In addition, lithium plunged in price as “electric-vehicle sales growth has slowed. Lithium prices are down more than 80% since peaking in 2022. And Albemarle happens to be the world’s largest producer of the stuff, Jacob Sonenshine wrote in Barron’s. “But now, lithium prices show signs of stabilizing. If that holds, Albemarle’s battered stock could soon get a nice lift.”
Piedmont Lithium (PLL)
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I’d also take advantage of the weakness in top lithium stocks to buy, like Piedmont Lithium (NASDAQ:PLL). Long-term, I’d like to see the PLL stock double, if not triple from its current price.
For one, the company just secured its much-anticipated North Carolina mining permit. With that, according to Piedmont Lithium President and CEO Keith Phillips, “We plan to develop Carolina Lithium as one of the lowest-cost, most sustainable lithium hydroxide operations in the world, and as a critical part of the American electric vehicle supply chain.”
Two, the company just shipped about 15,500 dry metric tons (dmt) of spodumene concentrate in the first quarter, as North American Lithium (NAL) achieved new quarterly and monthly production records. “NAL is forecasted to achieve full run-rate production by H2’24. Based on this projection and per its offtake agreement, Piedmont expects to ship approximately 126,000 dmt of spodumene concentrate in 2024,” they added.
Amplify Lithium & Battery Technology ETF (BATT)
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Or, we can jump into an exchange-traded fund (ETF), like the Amplify Lithium & Battery Technology ETF (NYSEARCA:BATT).
With an expense ratio of 0.59%, the oversold BATT ETF provides exposure to global companies that develop, produce and use lithium battery technology — all for less than $10 a share. BATT ETF has 89 holdings, including Albemarle and Sociedad Quimica (NYSE:SQM). It’s also another top ETF that could double, even triple, when lithium prices start to push well off their low.
With lithium prices starting to bottom out along with some of the top lithium stocks, this may be the cheapest we’ll see the LIT ETF trade at for quite some time.
Remember, as noted earlier, analysts at Fastmarkets say demand for lithium in the U.S. could grow by 487% to 412,000 tonnes by 2030. Should that happen, a shortage of supply coupled with explosive demand will lead to another massive spike in lithium. All of which will send the LIT ETF screaming higher.
On the date of publication, Ian Cooper did not hold (either directly or indirectly) any positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
