It’s Time to Get Greedy with Oversold Lithium Stocks

Lithium stocks are showing big signs of life again.

Albemarle (ALB), for example, is up about $5 a share after finding double bottom support. Livent (LTHM) is up about $1.02. Even the Global X Lithium ETF (LIT) is up $1.25.

While the gains aren’t much after such a downfall on supply issues, it could be the start of a bigger move. In fact, according to Bloomberg, “A sudden jump in the share prices of Chinese lithium producers is spurring optimism that a rout in the electric vehicle battery metal may be coming to an end.”

The downward trend for lithium is “already nearing an end,” said Zhang Weixin, an analyst at China Futures Co. It’s likely to bottom out between 80,000 and 90,000 yuan a ton, they added.

We also have to consider there may not be enough lithium supply to meet demand.

Albemarle, for example, “expects global lithium demand to exceed supply by 500,000 metric tons in 2030. Various consultancies and other producers have slightly different projections, but all warn of a looming shortage.” Even analysts over at Morningstar believe lithium supplies will need to rise from about 800,000 metric tons in 2022 to about 2.5 million by 2030 to meet demand,” as noted by Reuters.

In short, don’t write off lithium stocks just yet. Instead, consider using recent weakness as an opportunity. As even Warren Buffett will tell you, “Be greedy when others are fearful.”