Over the past few years, due to the strengthening of the U.S dollar and various other commodity factors, raw materials have underperformed. However, lithium has defied this trend as its value continues to increase as each year passes. For anyone thinking about investing in lithium, it is important to know which lithium mining stocks are worthwhile. Here is a brief overview of the top three lithium stocks that investors should watch for in 2017.
Investing in Lithium in 2017
The stock market is known to fluctuate and as a result, many are worried about the course of the market in 2017. If you find yourself worried, ask yourself this: should you be investing in lithium in 2017? Generally speaking, the answer to this question is yes. The nature of the market is considerably young and there are only a few lithium stocks to choose from so that in itself makes the process of investing in lithium a whole lot easier.
Keep in mind that there are two ways to profit off of lithium investments. If you are investing in lithium, you could profit from the raw material itself or from Li-ion batteries, which would mean investing in lithium battery stocks. As there are no lithium futures, one does not trade lithium as you would precious metals. Additionally, lithium does not respond to the same factors that drive gold, such as various geopolitical or market forces. For instance, lithium investments are not concerned with a high or low U.S dollar.
Top 3 Lithium Mining Stocks
1. Sociedad Quimica y Minera de Chile ($SQM)
As one of the largest lithium producers in the world, SQM is now in a joint venture with Lithium America Corp, a junior miner, in order to exploit a lithium carbonate deposit in the Salar de Cauchari of Argentina’s Jujuy province. In an attempt to produce roughly 40,000 tons of lithium carbonate over the next 30 years, SQM is planning to spend around $500.0 million.
2. FMC Corp ($FMC)
As another major lithium producer, FMC is preparing for an increase in demand. Despite hitting a rough patch following the collapse of commodities in 2012, lithium is already showing the capacity to lift FMC stock. As FMC gains a reputation as a lithium producer, the company is working on expanding its capacity to supply a “major” manufacturer of electric vehicles. Many presume that this manufacturer is Tesla Motors Inc.
3. Rockwood (NYSE:$ROC)
Claiming the title of the world’s main lithium producer, Rockwood is now a unit of Albemarle Corporation (NYSE:$ALB). For anyone investing in lithium, keep an eye on Rockwood as they control roughly 33% of global lithium production, with their revenue over US$500.0 million. Though most of Rockwood’s lithium assets are in Australia and Chile, it’s parent company, Albemarle, has deposits in the United States. With Tesla Motor’s expanding lithium battery production in Nevada, Rockwood is likely to benefit. Tesla is working on creating a massive Li-ion battery facility, and the production and delivery of batteries should start in 2017. As a result, this battery stock is perfect for anyone hoping to make lithium investments in 2017.
Lithium Battery Stocks
When investing in lithium battery stocks, it’s less of which stock to pick, and more of spending the time to get into the lithium battery trend as lithium batteries are the future’s energy source. Following its acquisition of SolarCity Corp (NASDAQ:$SCTY), Tesla Motors Inc (NASDAQ:$TSLA) has become a major lithium battery producer. In 2017. Tesla will start producing batteries. Tesla expects demand for its electric cars to flood and its production capacity to match demand, which is for roughly half a million electric cars by 2018.
On the other hand, Panasonic Corporation (OTCMKTS:$PCRFY), one of the top lithium battery companies in the world, has worked with Tesla on their factory in Nevada. However, Panasonic’s lithium battery unit is minor so, unlike Tesla, their risk profile is more diverse.
Investing in Lithium has become more and more popular in light of recent years, as lithium is becoming essential, and not just for rechargeable batteries. For instance, lithium is now used to advance industrial glazing and air-cleaning aircraft and submarines.
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