Lithium prices are officially waking up. Here are the stocks to watch
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The worst could now be over. Lithium prices are seeing their first sustained rise in three years as automakers and cell manufacturers react to the strong upward trend in EV sales.
The Benchmark Lithium Price Index – while still very low — was up 3.6 per cent in December.
Prices for spodumene (the feedstock Australian miners sell) improved by 2.6 per cent to an average of $US390/t.
This recent stability in lithium prices has already created a better investment environment in the lithium ion battery supply chain, Benchmark Mineral Intelligence says.
“In December … Australian gold and nickel producer, IGO (ASX:IGO) entered into a $1.4bn binding agreement to acquire minority stakes from Tianqi, in the Greenbushes mine and its Kwinana hydroxide facility,” it says.
“Moreover, Chinese chemical processors, Yibin Tianyi Lithium, Youngy Lithium, and Ganfeng Lithium invested in future production capacity, and several cell manufacturers including LG Energy Solutions (LGES), CATL, and Tesla, looked to secure future chemical supply via long term agreements and plan further megafactory construction.”
This creates a bit of a feedback loop: more investment = more lithium demand = better pricing = more investment.
Or something like that.
Investor sentiment is higher than it’s been for years and Aussie lithium stocks have been flying. Just check out this sea of green: