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Published on 31 Dec 2021 on Zacks via Yahoo Finance

Bet on These 3 Stocks to Cash in on Soaring Lithium Prices


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Prices of lithium have been rapidly rising of late. Per Trading Economics Website, prices of lithium carbonate — the main source for lithium — have jumped more than 400% year over year, having topped the all-time highs reached in 2017 and 2018.Rising demand for lithium and scarce supply are driving the price of the silver-grey metal. Amid the trending electric vehicle (EV) revolution, the demand for green vehicles is increasing every passing day. Thus, lithium, being the elemental metal in the manufacturing of EV battery packs, has become a hot commodity these days.The metal is used to manufacture lithium-ion batteries, the most common battery type used to power cutting-edge electric cars. The batteries flaunt a higher energy density than lead-acid or nickel-metal hydride batteries. Their compact size and lightweight make them highly coveted in the automotive industry.

Buoyant Prospects of Lithium Market

The US Geological Survey estimates that more than 70% of the lithium produced worldwide is now used in EV batteries. Thus, amid the rising popularity of EVs, the demand for lithium-ion batteries, which is currently the dominant technology for green vehicles, is burgeoning.Per the International Energy Agency, exponential growth in the EV space is likely to lead to a lithium demand surge of more than 40 times by 2030. Per a report by Mordor Intelligence, an analytics firm, the lithium market size was 280 kilotons in 2020 and is expected to grow, witnessing a CAGR of more than 10% between 2021 and 2026. Per Reuters, lithium demand is set to hit 1 million tons by 2025 and 3 million tons by 2030 from the 320,000 tons registered in 2020.Meanwhile, the supply of this metal is failing to keep at par with the raging demand. Under the scenario, crucial battery material prices have been skyrocketing, and the upward trajectory is set to continue next year.Per Fitch Solutions Country Risk and Industry Research, lithium carbonate prices will average $21,000 per ton in 2022, suggesting a 16.3% rise from this year’s average price.

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