Lithium is becoming increasingly popular as a material for the manufacture of batteries, mainly due to its high-density power and low weight. Those qualities make it ideal for powering electric vehicles, smartphones and other devices. As the demand for lithium rises, so does the interest in investors and speculators looking to cash in on its possibilities. And while lithium can be found in a variety of places, lithium producers are the ones responsible for tapping into these natural reserves and getting the material to market.
With that in mind, here is a guide to some of the top stock picks of the most popular lithium producers.
What To Look For In Lithium Producers
When evaluating a lithium producer, the most important factor to consider is location. Lithium is not universally found in abundance, so those producers who operate in parts of the world where there is a known lithium reserve have an advantage over those who extract from less well-known locations. Additionally, the quality of the lithium also matters, with higher-grade ore commanding higher prices. Finally, the production capacity of the company also needs to be taken into consideration as larger operations tend to have more efficient processes that can produce higher volumes.
The Top Stock Picks Among Lithium Producers
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Orocobre Ltd: Orocobre Ltd is an Australian-based company that is the first to develop commercially viable lithium brine reserves in the lithium hotspot of South America. With up to 86.5% ownership of the Salar de Olaroz deposits and all of the associated production facilities, Orocobre is well-positioned to benefit from the growing demand for lithium brine products.
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SQM Lithium & Potash: SQM Lithium & Potash is a Chile-based company that has been operating in the lithium business for almost 30 years. The company controls the world’s largest deposit of high-grade lithium, making it a top stock pick among investors. SQM produces battery grade lithium carbonate, lithium hydroxide as well as other products used in the lithium-ion battery production process.
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Ganfeng Lithium: Ganfeng Lithium is a Chinese-based company that is widely seen as the foremost player in the lithium industry. The company is estimated to be the largest lithium producer in the world, accounting for 48% of the world’s total supply. Its primary products include lithium hydroxide and lithium carbonate, as well as other battery-grade chemicals that are growing in demand due to the prevalence of electric vehicles.
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Albemarle Corp: Albemarle Corp is a US-based company that is the world’s second-largest producer of lithium. The company represents a key source of the raw material used in battery production and is the largest owner of lithium resources in the US. Albemarle is the primary source of the lithium-ion battery material used in many electric vehicles and its stock is seen as a long-term investment due to its high level of production and quality.
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Sociedad Quimica Y Minero De Chile (SQM): SQM is a Chile-based company that is currently the world’s largest producer and supplier of lithium, potassium nitrate and other specialty plant nutrients, though it is mainly known for its lithium production. The company, along with its subsidiaries, produces battery-grade lithium hydroxide, lithium carbonate, phosphates, and potassium nitrate.
These are the top five stocks of lithium producers that investors should consider when looking to diversify their portfolio. All five have a proven production track record, control of important reserves and a strong presence in the lithium battery market that makes them ideal for any investor looking for a long-term stock pick. While the prices and production of lithium can fluctuate over time, these five companies are seen as the frontrunners of the space and are sure to continue to provide investors with safe investments over the long-term.
