Top 5 US Lithium Battery Stocks for 2022

Project feasibility.

• Albemarle has proved it can already economically produce battery grade lithium in a period where lithium prices were much lower, illustrating the company’s ability to continue operations should lithium prices fall.

Ability to be self-funded.

• Albemarle’s lithium branch is already profit making, so earnings can be retained and capital can be invested into the aforementioned expansion projects without the need for significant capital raises or taking on large amounts of debt. Smaller companies and emerging players will have to undergo financing stages which carry risks and may result in shareholder dilution.

Albemarle has a firm grasp on the market and seems positioned to continue riding this lithium wave from strength to strength. But these factors don’t paint the full picture and investors should always consider the financials of a company to inform their assessment.

Significant Expansion pipeline.

• With SQM’s joint venture in Mt Holland expecting to enter production in 2024 and a drastic increase to the production capabilities of their Salar del Carmen project, there’s ample opportunity for the company to grow their presence in the market and beat out new entrants.

Variable exposure to lithium prices.

• Looking forward to 2022, SQM’s sales contracts are detailed as follows: 20% fixed or variable price, 50% variable price with a ceiling and 30% not contracted. This means that SQM will still be exposed to the increase in lithium prices on previously negotiated contracts even if the price of lithium was lower at the time the contract was agreed upon, opening the company up to increased revenues.

Investors should always consider the risks and financial health of a company to inform their investment decision.

Low cost focus.

• High lithium prices can make many more projects economically feasible, but striving for lower operating costs will mean a project can weather the storm if demand and prices fall. By securing a low-impurity lithium resource, Livent has allowed processing costs to be cut, giving a competitive advantage over other brine operations.

Exposure to Lithium Carbonate, Lithium Chloride and Lithium Hydroxide prices.

• New high-density batteries are more compatible with lithium hydroxide owing to greater nickel content in the cathodes. Should primary lithium demand switch from carbonate to hydroxide, Livent’s exposure to the prices in both products should help it navigate pricing volatility.

Livent is a smaller company and that does carry some possible risks.

Ability to fast-track commercial brine operations using existing brine operations.

• Standard lithium is able to piggy-back its operations off of LANXESS’ existing bromine extraction facility, negating the need for exorbitant capital expenditure that other companies of similar size will have to go through.

First to market with a revolutionary extraction process.

• Standard Lithium has developed its own direct lithium extraction (DLE) process called LiSTR. The company promotes this proprietary process as being able to deliver increased recovery efficiency when compared to traditional evaporation methods and a smaller environmental footprint. The most valuable part of this process is that it is scalable, modular and able to be bolted on the LANXESS’ existing bromine infrastructure, allowing Standard Lithium to bring their lithium to market more quickly than competitors.