Executing well on the development of new projects and keeping the cash flowing from existing ones will be keys this year for Albemarle. Investors should bear that in mind when buying a position, if any, in this and other lithium mining stocks. Last year, Albemarle stock fell to just a single-digit price-to-earnings multiple, which is about in line with a typical mining stock. It looked like a steal for a company expecting to grow the volume of its product sold by double-digit percentages (10% to 20% volume growth is the outlook for 2024). Ultimately, it’s the lithium market controlling the sails of Albemarle these days. But management seems to have weathered a severe storm and positioned itself for gradual recovery.
With mines closing and FIFO jobs on the line, WA’s government throws a lifeline to nickel miners
European automakers need greater involvement in the battery supply chain to source raw materials and precursor components to improve supply security. The SFA team completes a deep dive into the short- to long-term opportunities enabling the success of electric vehicle production across supported regions. Unique to Barchart.com, data tables contain an option that allows you to see more data for the symbol without leaving the page.
Investing in Lithium
- These high-performing ASX 200 shares have caught the attention of brokers and investors this week.
- Ultimately, it’s the lithium market controlling the sails of Albemarle these days.
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- In time, the surplus will be absorbed but before that happens the price of the metal is forecast to fall by around 17% to $12,000/t towards the end of the year but could drop even lower in the next three months.
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things to watch on the ASX 200 on Friday
Right now, instead of purchasing contracts for delivery on a spot market most lithium consumers choose to directly sign long-term offtake agreements with lithium miners, securing a guaranteed supply at a fixed price. The current state of the lithium markets has drawn parallels to the iron ore market prior to the 2010s, where pricing would follow an annual benchmark negotiated between miners and steelmakers each year. While the end of lockdowns coincided with another surge in demand, sending lithium prices to their all-time high of 575,000 CNY (USD 80,000) per tonne, this rally was short-lived.
Time to buy the stock?
Both minerals are key components of batteries used in electric vehicles (EVs). Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show and premium investing services. The Motley Fool launched its Australian presence in 2011, and since then has grown to reach over 1 million Australians.
A TikToker interviewed Baz Luhrmann on the streets of Newtown … and had no idea who he was
Lithium’s advantages are its high electrochemical potential, while it also has the lowest density and highest specific heat capacity of all metals. It is found in the Earth’s crust, but never in its pure metallic form as it exhibits similar properties to other alkali metals, such as high reactivity and flammability. Barchart Plus Members have 10 downloads per day, while Barchart Premier Members may download up to 250 .csv files per day. Most data tables can be analyzed using “Views.” A View simply presents the symbols on the page with a different set of columns. This story has been told before (by me, at numerous points in 2023), but it appears that one of the leading producers of lithium, Albemarle (ALB 0.28%), is signaling that the worst might finally be over. “We are seeing a couple of auto original equipment makers tempering their EV targets as weaking sales push auto OEMs to focus on traditional ICE powertrains.
Lithium futures
In the early 2000s, explosive growth in iron ore demand from China was the catalyst that finally led to change in the iron ore markets. It would take a concerted effort from BHP and other top miners for the iron ore markets to shift towards the spot pricing model it follows today. In 2022, however, a record-breaking price rally occurred due to a large supply deficit. Lithium’s largely agreement-based supply model also contributed to this squeeze, sending lithium prices skyrocketing over 5x.
Meanwhile, Ms King said she would also take a proposed production tax credit — designed to encourage processing of minerals onshore — to treasury to be costed. The company revealed it would cease nickel mining in Kambalda, triggering BHP Nickel West to shut down part of its processing operations nearby. Forecasts of huge demand lead to sudden price hikes that ultimately feed a surge in exploration and production. By taking up this offer, you will also be enrolled in our auto-renewal program, which is our way of making your ongoing subscription easier by ensuring uninterrupted service. Don’t worry, though – you’re not locked in, and can cancel your auto-renewal at any time before each ‘anniversary’ date without question or penalty.
Lithium is a soft, silvery-white metal belonging to the alkali metal group. It is highly reactive and flammable, making it essential in various industrial applications. Most notably, lithium-ion batteries power everything from smartphones to electric vehicles. You can directly buy stocks in companies involved in lithium mining or in Li-ion battery production.
The nation’s ban on nickel ore export in 2020 led to investment pouring into its domestic refineries. The plummeting prices have pushed WA’s major industry players to mothball their mines, workers to lose jobs and the government to all but panic. Lithium is the lightest solid element and the lightest alkali metal.
By the time their operations come on line, they could be dealing with wildly different lithium prices. Something similar is happening in the lithium markets, with top producer Albemarle having begun holding auctions for its mined lithium https://www.broker-review.org/ since March 2024. These auctions allow buyers to secure pricing that’s more truly reflective of the present supply-demand dynamic, as opposed to being forced to lock in fixed long-term pricing to avoid not having enough supply.
