Bank of America analyst Steven Byrne has significantly raised his average price for lithium to $14,000 per metric tonne from his previous forecast of $10,000 per metric tonne, and his 2025 average price forecast to $16,300 per metric tonne from his previous forecast of $15,500. The analyst believes that the green energy boom, coupled with a recovery in global electric vehicle sales will drive lithium prices to even higher levels.
Meanwhile, analysts at Fastmarkets say lithium demand in the US will grow by 487% to 412,000 tonnes by 2030. If this is the case, supply shortages coupled with exploding demand will cause lithium prices to soar once again.
Considering these, it would certainly be wise to take advantage of the current lithium market downturn to buy shares of lithium miners at lower levels, such as the three below.
Albemarle (NYSE:ALB)’s latest first-quarter earnings report missed profit expectations. However, this was expected amid a roughly 80% plunge in the price of lithium. The earnings report showed that the company’s first-quarter revenue was $1.36 billion, down 47% from $2.58 billion in the same period last year; adjusted EBITDA was $291.2 million, also much lower than the $1.76 billion reported a year ago; and adjusted profit was 26 cents, lower than the expected 27 cents.
Still, with lithium prices finally showing signs of bottoming out, Albemarle’s future as a giant in the lithium industry could be very bright. Lithium prices have fallen more than 80 per cent since peaking in 2022 as electric vehicle sales growth has slowed. Jacob Sonenshine, a market analyst for Barron’s, says lithium prices are now showing signs of stabilisation, and if that holds, Albemarle’s battered shares could soon recovered significantly.
Piedmont Lithium (NASDAQ:PLL) is another weak top lithium stock. In the long run, investors may even be hopeful to see its stock price at least double from its current level. For starters, the company just received its long-awaited North Carolina mining licence. Keith Phillips, the company’s president and CEO, said Piedmont Lithium plans to grow Carolina Lithium into one of the lowest-cost, most sustainable lithium hydroxide operators in the world and take a crucial role in the U.S. electric vehicle supply chain.
Furthermore, because North American Lithium is expected to reach full production in the second half of 2024 as the company has just set new quarterly and monthly production records, having just shipped approximately 155,000 tonnes of lithium concentrate in the first quarter. Piedmont expects to ship approximately 126,000 metric tonnes of lithium concentrate in 2024 based on this forecast and the offtake agreement.
Investors who are unsure about the risk of investing in individual stocks can opt for an exchange traded fund (ETF) such as the Amplify Lithium & Battery Technology ETF (NYSEARCA:BATT). With a 0.59% fee, this ETF offers exposure to global companies that develop, produce, and use lithium battery technology for less than $10. The ETF holds 89 companies, including Albemarle and Sociedad Quimica (NYSE:SQM). Once lithium prices start to move significantly off their lows, this ETF could double or even triple from its current price.
As mentioned earlier, Fastmarkets analysts predict that by 2030, lithium demand in the U.S. will grow 487% to 412,000 tonnes. Should that happen, supply shortages coupled with exploding demand will cause lithium to spike dramatically once again, all of which will drive the price of this ETF so much higher.
