Smart
Money in the #Lithium Sector Betting on Future Global Demand; (NYSE: $ALB)
(TSXV: $SLL.V) (OTCQX: $STLHF) (NASDAQ: $TSLA) (TSX: $NMX.TO) (OTC: $NMKEF)
Point Roberts WA,
Delta BC – February 27, 2019 -Investorideas.com, a leading investor
news resource covering AI and lithium stocks issues the first article in a two-part
series looking at the increased global demand for lithium and how smart money
is betting on its long-term growth.
Read this in full at https://www.investorideas.com/news/2019/mining/02271Stocks-Lithium.asp
Leading the bullish sentiment is the world’s largest producer of
lithium, Albemarle Corp. (NYSE:
ALB), reporting fourth quarter results on
February 20th, with a headline of ‘ALBEMARLE ENDS 2018 STRONG; PROJECTING
CONTINUED GROWTH IN 2019’.
Fourth quarter net sales were
$921.7 million, an increase of 7% over the prior year; earnings were $129.6
million, or $1.21 per diluted share, an increase of 162% over the prior year. Fourth
quarter adjusted EBITDA was $264.3 million, an increase of 8% over the prior
year; adjusted diluted earnings per share was $1.53, an increase of 14% over
the prior year.
The long term
investment potential of lithium is not being missed by Standard Lithium Ltd. (TSXV: SLL.V) (OTCQX:STLHF), a specialty chemical company
focused on unlocking the value of existing large-scale US based lithium-brine
resources, who recently announced it has entered into
a funding equity agreement with a syndicate of underwriters led by Canaccord
Genuity Corp., for gross proceeds of $10,500,000 (CAD).
The net proceeds from
the Offering are expected to be used by the Company for advancing its existing
asset portfolio and for general working capital purposes. The Company's
flagship project is located in southern Arkansas, where it is engaged in the
testing and proving of the commercial viability of lithium extraction from over
150,000 acres of permitted brine operations utilizing the Company's proprietary
selective extraction technology based on AI
(artificial intelligence) technology.
Looking at the outlook for the
sector, Zacks Research reported following Albemarle’s fourth quarter
numbers, with the headline ‘Lithium ETF at One-Month High: Here's Why’, “Such
upbeat guidance and facts boosted investors’ confidence about lithium demand.
Albemarle’s results acted as a cornerstone for the industry. Shares of other
key lithium producers also gained on Feb 22.”
Albermarle
is part of the top 10 holdings of the Global X Lithium
& Battery Tech ETF, a fund that invests in the full
lithium cycle, from mining and refining the metal, through battery production. Other companies in
their top ten include FMC
Corp., LG Chem Ltd., Byd Co., Samsung, GS Yuasa Corp., Enersys, Panasonic and
Tesla Inc. (NASDAQ: TSLA).
Looking at supply and
demand, Tesla says, “To ramp production to 500,000 cars per
year, Tesla alone will require today’s entire worldwide supply of lithium-ion
batteries.”
So, Tesla bet big
money and in 2014 began construction on the Tesla Gigafactory to supply enough
batteries to support Tesla’s projected vehicle demand.
BYD Company Limited,
the Chinese leader in the EV game is following suit, albeit a few years later, and
just announced it has broken ground on a new 20 GWh battery
gigafactory for electric cars, investing $1.49 billion USD in the facility.
The
lithium market has not been without its setbacks though, as Nemaska Lithium
Inc. (TSX: NMX.TO) (OTC: NMKEF) recently announced that it
has terminated its multi-year supply agreement with Livent Corporation. The
Supply Agreement pertains to the provision of up to 8,000 tonnes per year
(28,000 tonnes in total during the term of the contract) of lithium carbonate
starting April 1, 2019.
While
some see this a major issue, one news article
stated that, “Growing evidence points
toward a supply-side which will continue to struggle to deliver as Nemaska
Lithium Inc. move to terminate a multi-year agreement to provide lithium
carbonate to Livent Corp. The deal with Livent, spun out of major US lithium
producer FMC Corp., saw Nemaska provide up to 8,000 tpa of lithium carbonate
starting in April 2019. However these examples only serve to highlight supply
instabilities across an infant industry.”
Looking
at the recent volatility in the sector, while seeing a bullish future,
Metalbulletin.com reported, “While the supply side is weighing on sentiment, the
demand side of the equation remains extremely bullish - and increasingly so.”
Demand for lithium is without question on
the rise in the near and far reaching future, and while the industry has
suffered minor blips and supply instabilities, smart money is betting on a bullish
future for lithium and the stocks in the sector, with a leader Albemarle and juniors like Standard Lithium doubling down on what is looking like
a sure thing.
Investor Ideas
directory of lithium stocks: mining stocks directory and cleantech stock directories, relating to
batteries.
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