Lithium prices have crashed after a two-year bull run led by soaring demand in China. The spot price of lithium plunged 70% between last November and April of this year. The key component in electric vehicle (EV) batteries has been driven lower by a downturn in China’s EV market, and also by a weakening global economy and slumping consumer demand for electric vehicles worldwide. While the crash in lithium prices has been disheartening, it has brought down the prices of some high-flying stocks of lithium-producing companies, presenting a buying opportunity for shrewd investors.
With lithium stocks down, investors would be smart to take a position now before the battery metal prices rise again, lifting the entire industry higher. Despite the current slump, the price of lithium is forecast to increase more than 50% between now and 2028, according to Fortune Business Insights. Get rich with these three lithium stocks that are on the rise or likely to rise in the near future.
Top Lithium Stocks to Buy: Lithium Americas (LAC)
Lithium Americas (NYSE:LAC) has been on an upswing this year, having risen 28% since January. However, LAC stock is still trading 10% lower than where it was 12 months ago. The share price is 42% below a peak reached in April 2022. The company operates lithium mine sites in North Carolina and South Dakota and is a leading producer in the U.S. The stock has been brought lower by the crash in lithium prices but remains a leading producer of the battery metal.
Lithium Americas also has several upcoming catalysts that could boost its stock price, including a new $4 billion lithium mine in Argentina that is expected to ramp up production this year, and the Thacker Pass project near the Nevada-Oregon border that is expected to break ground this year and has attracted a $630 million investment from automotive giant General Motors (NYSE:GM). The company has also announced plans to separate its Argentine and North American units into two separate entities, pending shareholder approval.
One can’t discuss lithium stocks without mentioning Albemarle (NYSE:ALB), which is the largest producer of lithium for electric vehicle batteries in the world. Over the last six months, ALB stock has declined 27%, including a 3% pullback this year. The crash in lithium prices has hit Albemarle particularly hard following a 490% gain between March 2020 (when the pandemic hit) and November of last year when the lithium market tanked.
As with Lithium Americas, Albemarle has been lining up agreements with leading automotive companies. The company just recently announced a deal to supply the Ford Motor Co. (NYSE:F) with battery-grade lithium, which will enable the automaker to scale its EV production. Despite the decline in its share price this year, ALB stock continues to be upgraded by Wall Street analysts. UBS recently upgraded the stock to a “buy” rating and a $255 price target, calling Albemarle “the best growth opportunity in chemicals.”
Piedmont Lithium (PLL)
Piedmont Lithium (NASDAQ:PLL) is an Australian mining concern that is recovering lithium from a site in North Carolina. Like most lithium stocks, shares of PLL have been brought lower over the last year. However, Piedmont has recovered much of what it lost with a strong rally this year. Since January, the share price has gained 37%. Piedmont stock is now down less than 2% from where it was 12 months ago. In this respect, PLL stock is in better shape currently than many of its peers.
Piedmont Lithium’s YTD rally has been extraordinary given that the stock has been able to shake off a critical short seller report from Blue Orca Capital that claimed its mine licenses in Ghana were obtained through corruption. Investors and analysts seemed to take the report in stride, and tend to focus instead on the agreement Piedmont Lithium has in place to supply lithium for the batteries used by global EV market leader Tesla (NASDAQ:TSLA).
On the date of publication, Joel Baglole held a long position in GM. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.