Best lithium stocks to buy for long term holding?

[owll]

I’m long term bullish on lithium for a number of reasons 1) Market growth over the next 5-10 years 2) Irreplaceable as a foundational commodity for the green energy transition 3) Major consolidation will continue to happen leading to more / better upstream growth opportunities.

Is anyone else holding ETFs or stocks? What are your lithium plays for 2024?

I'm bullish on $LIFT.V. They're one of the most well positioned junior miner on lithium at the cusp of a major resource estimate announcement (it helps that they have the largest lithium drill taking place in North America).

 

[snowbrush]

@owll I'd be cautious leaning too far into this thesis: lithium is not rare. The very cheapest to mine lithium deposits are maxed out in the Atacama but there is plenty hard rock based lithium around the globe. The price ceiling is going to continue to fall as attention gets paid to floating it out of hard rock more efficiently. That's to say nothing of alternative battery technologies.

Beyond that, the mining and process industry has been watching this trend forever - the thesis you laid out is 20 years old. There is really no new news here.

I'd just caution going too far in on this one.

 

[comyn]

@snowbrush Correct - it's really important to understand the supply side if you are making commodity investments. Way too many people on Reddit only look at demand. I might be wrong, but lithium simply doesn't look very attractive from a supply side POV. The barriers to entry are not high at all, and there's shit loads of it.

 

[snowbrush]

@comyn It’s abundant, but in most places (outside Latin America) it shows up in small concentrations so mining and processing it is expensive. But even with that, it’s just math - price goes up, those reserves become more economical to pursue, and folks will find ways to process it into Li02 more efficiently. So the upside here is sort of limited.

 

[dreamermai]

@snowbrush Let alone improvement in extraction technology ... fraking, anyone?

 

[snowbrush]

@dreamermai For sure. Though that's the other side of this - chemical floatation of industrial minerals is a very well developed (read: old) technology / process. The best argument for betting on lithium is that there's nothing on the horizon that's going to make it cheaper to extract which I think is a good medium-term bet, but it's a big risk for the long-term. But as they say, in the long-term we're all dead.

 

[deinien]

@comyn Agreed. Where there may money to be made is in the refining of raw lithium from rock or brine in lithium hydroxide. The same is true for rare earth minerals, cobalt, nickel, and manganese.

 

[ck90]

@snowbrush Have you ever heard of Sugon Lithium? It's pretty rare.

 

[wenwood]

@ck90 I haven't heard of it, and googling it seems to indicate (based on "did you mean sun lithium) that isn't a big thing.

At any rate, all that really matters is 1) that it has 3 protons and 2) how easy it is to extract and refine.

 

[ck90]

@wenwood SUG ON DEEEZ NUTZZZ???

 

[catwe3]

@ck90 Angry up vote.

 

[xlembonis]

@owll I'm all in on Albemarle (ALB). I'll watch LAC for fun, but it isn't sla long term play. ALB has a huge history of being profitable in any market conditions and sustaining a dividend. It holds some of the best areas for lithium harvesting that it's set in stone until 2040.

I don't really see any other competitors that I feel confident will be doing well in 10 to 15 years. Obviously there is more explosive growth potential in something like LAC, but I think it will be a class in the plan as bigger players are able to weather these period price crashes. The P/E ratio and dividend alone makes ALB attractive, even though I know P/E has a somewhat odd pattern for commodities producers and miners.

If minimum lithium is looking to be unprofitable long term, ALB has the resources and cash flow to pivot into a more profitable commodity. Few other companies can do that, especially not without taking on mountains of high interest debt.

 

[believeume]

@xlembonis Hi, this is interesting. Why do you think it’s down so hard since 2022. I’ve been looking to get into the raw material sector and this one seems like a good buying opportunity.

 

[louieneedspeace]

@believeume Down compared to what? It's back to the realistic prices from 2020. It got pandemic supply chained and shot through the rough, so the pendulum swung back.

There's an 12-18 month delay in turning up production from brine based lithium. They can pump more water out the ground immediately but it takes that long to turn it into carbonate. Demand increased, but there was only so much lithium in the pipeline, plus the whole pandemic. Suppliers turned on faucet, supply go up, price go down.

 

[xlembonis]

@louieneedspeace It's a bit unfair to say that 2020 was realistic, especially because the monetary policy and inflation since then has changed the whole game. Additionally, lithium is cyclical. We are talking long term investment. Whether national targets will be hit or not, lithium will rebound eventually and the companies with history of being able to weather the ebbs and flows of demand should trade at a premium.

If priced as a small, speculative company, I'd agree with you. The punishment ALB received simply didn't correspond to the fundamentals. By another name/product, once could argue the numbers alone would comfortably justify a value of $150 to $200/share.

 

[louieneedspeace]

@xlembonis Oh i agree with you 100%- i was talking about the price of the commodity itself as it is traded on the market. I thin the demand for lithium will outpace the supply for quite a while. Commissioning plants at resources to generate 1000s of tons of LCE per year is not a fast process. I'm all in on albamarle, and think most LCE generating companys will come to find profit. It is a big space with significant room for competition. Established companies will flourish.

 

[janimelody]

@believeume Currently the high interest rates pushed down the prices of basic materials suppliers. This is because most of basic materials require a lot of money to be spend before getting returns.

This means most valuations take into account a lower return which means a lower fair value. If you're looking to enter now would be a good time (still a bit early).

Large funds are expected to take gains on semiconductor markets and diversify into socks that profit from lower interest rates because of the predicted interest rate reductions.

I am, however, just mentioning what I've heard and read. So do your own research and make your own conclusions.

 

[marinaamz29]

@xlembonis Omg! 3 months ago I had this same thought with same reasoning. I put in a hefty chunk only to see Albemarle immediately drop. Super glad to hear someone else was doing this

 

[getting_old]

@xlembonis I have lately been holding both, but ~4x as much ALB as LAC, the latter being largely speculative. Made money on both in the past few years, selling on the way up, and restocked in recent weeks.

 

[relate]

@xlembonis LAC has the rights to Thacker pass though