Lithium stocks are the shares of companies that engage in the mining or processing of lithium. Unlike other precious metals such as gold and palladium, traders are not able to invest in lithium as a commodity. Instead, they can gain exposure through investing in publicly traded lithium companies. This is similar to physical uranium and uranium stocks.
Lithium is mainly sourced from spodumene mines or extracted from brine deposits. As one of the world’s largest producers of lithium, Australia contains the most spodumene mines. Brine production is mainly concentrated in South America. The two main types of lithium produced by companies are lithium carbonate and lithium hydroxide.
As expectation grows, developers are focused on trying to create lighter and faster products and are concerned about the types of lithium used in the production of their products. Where is growing rapidly and huge companies like Tesla are relying on lithium as a key ingredient of its products, the demand for lithium has increased greatly. Where some traders are worried by possible volatility in the market, other traders view investing in lithium as a great opportunity to gain potential reward from a market that has seen a rapid rise in demand.
Traders can invest in lithium mining stocks, which are shares of companies that are involved in the mining of lithium, and lithium battery stocks, reflecting companies that develop the batteries. It is also possible to trade shares of companies that are involved in both.
