Prospects on lithium (or how low will it go?)

Hey folks!

I was wondering what are people opinions on lithium and how it has been going on a bearish mood loosing 50% in the last year (the exact opposite of Uranium!).

I’m following SQM, ALB, SLI, LAC and the LIT ETF. All have very similar price progession in the last ~2 years, and look like it might keep going down, maybe to 2019 levels, as demand for EVs is diminishing and new deposits are found.

Hard to say, I am not supporting Uranium mining out of principle and moral concerns.

I believe Lithium will rebounce. Especially low cost producers such as Atlantic Lithium will have their day in the sun :slight_smile:

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Hi, can you elaborate ?

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I won’t support nuclear energy, as I see it shortsighted and risky, for environment, society, future…

Also anything that allows enrichment to build dirty bombs is something I don’t want to support.

That being said if I look around there is probably little alternative to base line electricity production. But I don’t see it as the lesser but the greater evil. It’s a very complicated topic. Anything one could say in this thread would just come short

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thank you for clarifying )

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Way to hijack a thread buddy. Moral concerns about one of the cleanest energy sources we have available but probably wrote this typing on an iPhone or Samsung.

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Nuclear isn’t one of the cleanest energy sources. One could say that it doesn’t have carbon emissions/GHG, but it’s one of most dirtier, with radiation contamination for thousands of years. People won’t die from climate change and carbon emissions but will die from radiation.

People tend to forget or simply don’t know the nuclear disasters that happened and their consequences. Even today, a couple of decades after, some regions are contaminated for living beings (e.g. Chernobyl disaster (1986)). Fukushima (2011) nuclear plant is releasing/released contaminated water to the Pacific Ocean.

In common with lithium, it has also mining problems (pollution, social/labor exploration, etc), transportation, transformation, disposal (final life).

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I try to leave moral considerstions out of investing insofar as I can. Look hard enough and can find ethical dilemmas with most investments.

Lithium has plenty of problems too…

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I understand your concerns about nuclear. Personally I’m not against using it for electricity generation. I completely support anybody who wants to invest according to their own ethical and moral beliefs. I would never invest in tobacco and try to avoid several companies because I don’t like their corporate ethos etc.

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Going back to the original question. What do you think of the prospects of Lithium?

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In 1 word - undervalued. I’m in ALB and am loading the boat! The TAM on this is enormous and despite EV’s and ESG taking a relative hammering atm alternatives to fossil fuel guzzlers are the way to go medium to long-term.

I agree with you. From the companies I’ve been checking ALB looks like the one it’s best positioned for when the bounce happens.

The question still remains: will lithium still keep going down? I’m speculating that pricess will keep going down for another 10-15% (to oct 2020 levels) before they stabilize and slowly (but surely) increase.

For anyone who wants to read more about ALB, seeking apha recently published an article on it: https://seekingalpha.com/article/4665944-albemarle-stock-overvaluation-amid-current-headwinds-sell

I have to say I watch far too many YT channels and Podcasts re lithium, Money of Mine, RK Equities Rock Stock Channel, Crux Investor, The Global Lithium Podcast, Recharge by Battery Mineral Reviews. The consensus is that Lithium prices are at OR NEAR the bottom, it’s currently at a price where some mines won’t get funding to get into productions, which in the the long run could well cause future shortage and high prices. To address your question the industry voices above are saying the reason for the current low prices is that Spodumene/SC6 from Africa wasn’t included in their projections, the high price also meant that it was profitable to produce Lithium from Lepidolite from within China, which has now reduced due to the low prices. The third factor was that the Chinese producers overstocked on SC6 and didn’t need to buy, leading to a drop in prices. It is BELIEVED that the stock piles are now running down and once the Chinese New Year celebrations are over that a new round of purchases will be forthcoming.
I recommend all the above for reference, that is where my information is sourced (and summarised). The next questions to be answered is when will the price start to recover and what will the price be, no one is really sticking their nose out at the moment but all say it has to go higher soon. In one respect the current low lithium prices is a good thing, as there is no point in developing sodium batteries (unless application specific) to reduce the TAM.

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An update on my last response, from watching Rock Stock, Recharge and others it is BELIEVED that the bottom has passed but it will be a long slow road to recovery of prices and price stability, years not months, unless there’s another rocket in spot price in which case I’ll be selling out once I’m in profit and keeping out of the boom and busts. For short term gains it’s back to picking individual stocks, DD etc. Currently Uranium is the flavour of the decade, or more, once the hedge funds that can buy, hold and sell Uranium have made their money and moved on the Uranium spot price will settle and I hope, but hope isn’t a strategy, that the money comes back into lithium. Nickel, Nat Gas and coal are on a lot of peoples watchlist waiting for the next cycle, but Lithium COULD be ahead of them.
I think part of the issue is China is locked out of American and Australian listed/owned companies for the purpose of take overs, China is moving heavily into African for resources and taking their money out of places they’re not welcome, this stops investment/JVs which causes more debt raises and dilution that may not have been needed, that’s a macro issue, and linked to all minerals and commodities.

Alb has just done a fairly massive raise, believed to clear some high interest debt, upgrades and expansions. I think it’s case of sit and wait till interest rates come down enough (2025) and the money comes back into mining. I bought in 2021/22 expecting to hold till 2025, I think it will take longer to make a profit to cancel out the missed opportunity cost. But that’s investing!

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Reving this thread as lithium miners had a tough couple of weeks, with a few copmanies (Albemarle, Lithium Americas, SQM, and ETFs like Global X Lithium) going back to 2020 SP prices.

Also it looks like a good number of mining companies SP went down in the last couple week.

What are your opinions? Do you think this is the bottom? And if yes, how to do think the SP will remain where they are for a long time, maybe with meagre returns? or that it will go back to something similar to the growth of 2020-2021?

@BlueMark From watching my previously stated sources and others, it looks like Lithium is currently out of cycle, Gold, Silver, Copper and Uranium look to be currently in favour with Platinum possibly next. I think it’s just sit and wait for Lithium to come back into cycle but who knows when that will be, personality I doubt 2024/5 but will be extremely happy if I’m wrong!

With Lithium being out of favour that means less mines will get financed and when it comes back into cycle the share price will hopefully go higher than the previous cycle.
Personally I have built a position size I’m happy with and do not want to DCA down and add to that position size at this time, but potentially will once the cycle starts again.