Is now the time to buy lithium stocks?

Richard Hemming


With lithium stocks on the rise, ASX investors are asking is now the time to buy? This is a good question and an important qualifier is that lithium stocks have very different risk profiles, which is reflected in their price action. To much fanfare, the US based and ASX listed Piedmont Lithium (PLL) reached a deal with Tesla. Its stock went from 9 cents to 66 cents. It’s now back to 37 cents.

Battery charged demand 

Based on projections of global electric vehicle (EV) introductions and required lithium for their batteries, global lithium demand is expected to increase from current levels of around 300ktpa lithium carbonate equivalent (LCE) to around 900kt in 2025. Further out, demand is projected to escalate to around 2mt LCE in 2030, 3.5mt in 2035 and over 5mt LCE in 2040.
 
By 2040, battery use is projected to account for almost 90% of global lithium demand compared with around 55% today. To uncover the lithium stocks on our radar, start your 14-day free trial now

Lithium is now an essential input 

The key takeout is that its project is not advanced. Lithium stocks that we cover at Under the Radar Report are all in production, hence there is less uncertainty and they're in a better position to benefit from rising battery demand. The trend for electric vehicles is gathering pace, particularly in Europe, where there are mandates that new petrol vehicles cease production at a certain date. EV production is ramping up and lithium is an essential input.
 
The election of Joe Biden to the US Presidency means that renewable energy and emission reduction is on everyone’s agenda.

Which lithium stocks do you buy? 

We’re bullish on the periodic table’s lightest metal because of increasing demand and supply constraints, which include the lengthy commissioning for new projects and the high quality required for battery manufacture.

In tomorrow’s stock report our resources analyst Peter Chilton looks in depth at the lithium fundamentals and gives subscribers two lithium stocks to buy now. These are stocks that ASX investors don't want to miss.  

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About the Author

Richard Hemming

Richard Hemming (r.hemming@undertheradarreport.com.au) is an independent analyst who edits www.undertheradarreport.com.au, which provides investment opportunities in Small Caps that you won’t get anywhere else.

Under the Radar Report is licensed to give general financial advice only (AFSL: 409518). The author does not own shares in any of the stocks mentioned.

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