Weekly Market Recap (Mar. 1) – It’s Time to Be Greedy for Lithium, the White Gold

Be Greedy for Lithium, the White Gold
Published on: Feb 29, 2024

Buffett once said, “Be fearful when others are greedy and be greedy when others are fearful.” This investment logic is applicable to all investment areas, and it’s particularly suitable for lithium, an energy metal, given the global energy transition.

Lithium is an indispensable material for power batteries due to the lack of economically viable alternatives in the short term. With the explosive growth of the electric vehicle industry in recent years, lithium production and demand have surged to new highs, making it the “white gold”. The price of lithium also skyrocketed, with lithium carbonate prices rising from 53,000 RMB/ton at the beginning of 2021 to 560,000 RMB/ton by the end of 2022, a tenfold increase.

However, the lithium industry has also faced setbacks, with lithium carbonate prices dropping to $17,265 per metric ton by December 13, 2023. Looking ahead to 2024, major institutions generally expect the lithium market to be relatively stable, with Fastmarkets predicting that lithium’s average price will remain near current levels, and Benchmark also believes that the 2024 lithium market will be in a relatively balanced state.

In the long term, major countries have designated lithium as a strategic metal, making the long-term rise in lithium prices inevitable. The world’s largest lithium producer, Albemarle (NYSE: ALB), recently stated that the low lithium prices are unsustainable, and to meet the long-term growth in lithium demand, lithium prices must rise to stimulate supply investment. Fitch Solutions’ BMI, in a recent report, pointed out that the world is expected to face a lithium shortage as early as 2025.

On the supply side, Latin America is rich in mineral resources, with Chile, Argentina, and Bolivia collectively known as the “lithium triangle”, accounting for over half of the world’s lithium reserves. Despite the sharp drop in lithium prices, Chile’s Minister of Mining, Aurora Williams, stated that lithium companies take a longer-term view and continue to show interest in the new projects offered by the country.

Last October, Mr. Nikolaos Cacos, President & CEO, Director of Argentina Lithium & Energy,  join us at METALS100, highlighting a US$90 Million Investment by Stellantis, the world’s leading automaker. The company is focused on acquiring high quality lithium projects in Argentina and advancing them toward production, it has assembled a first-rate team of experts to acquire and advance the best lithium properties in the “Lithium Triangle”.

Clean Energy Electric Cars Energy Metals Lithium