Lithium: What's all the fuss about?

Technological advances in batteries that allow them to store more energy, in a smaller physical size, are pushing us towards greener alternatives to burning fossil fuels. Batteries are making a comeback and are set to become a more important part of the energy landscape. Tesla is making affordable battery powered cars and other manufactures have already signaled their intent to do the same, while home battery storage is supporting the spread of renewable energy. The key material allowing batteries to become smaller and more efficient is lithium. Historically the problem with batteries was size and weight; this made them impractical for many uses. Lithium has allowed batteries to become smaller, lighter and more efficient. Additionally, the use of lithium in batteries allows them to be recharged more efficiently, further increasing their range of applications.
Glennon Capital


The increased demand for lithium has meant that the price of lithium carbonate has increased by a huge 96.2% over the past year. Consumption is forecast to grow at 11% per annum for the next few years with the main driver of growth being rechargeable batteries; of that batteries for cars are expected to grow at 27% per annum until 2025

Australia is currently the largest producer of lithium. This has meant that there has been a rush towards investment in the few listed companies that are current or prospective lithium producers.  Of note is Pilbara Minerals (ASX:PLS), which has increased from 4.5 cents just 18 months ago to 63 cents this week. The business has yet to produce any lithium.

chart.png While lithium is up oil is down. It’s ‘Peak Lithium’ and the sky is the limit. But as with oil, the supply side response is coming; longer term the perceived lithium shortage will be met by supply and prices will be capped. The question is when. This article originally appeared on the glennon capital website (VIEW LINK)

1 stock mentioned

Glennon Capital
Glennon Capital
Fund Manager

Glennon Capital was founded in 2008 by Michael Glennon. Previously, Michael worked with some of the best institutional small company fund managers in Australia. In 2007, he received the IMCA Money Management Fund Manager of the Year (Small Cap)...


No areas of expertise

I would like to

Only to be used for sending genuine email enquiries to the Contributor. Livewire Markets Pty Ltd reserves its right to take any legal or other appropriate action in relation to misuse of this service.

Personal Information Collection Statement
Your personal information will be passed to the Contributor and/or its authorised service provider to assist the Contributor to contact you about your investment enquiry. They are required not to use your information for any other purpose. Our privacy policy explains how we store personal information and how you may access, correct or complain about the handling of personal information.


Sign In or Join Free to comment