Lithium isn’t traded on a stock exchange, and there isn’t a futures market with individual investor access, therefore investors can’t invest directly in it. Lithium producers’ equities can be purchased individually or through exchange-traded funds by long-term investors.
Is there a market for lithium futures?
Because there are no exchange-traded futures for lithium, unlike other industrial metals like copper, nickel, and aluminum, there is no method to invest directly in the commodity.
Lithium Derivatives Like CFDs and Options
Traders can speculate on the price of lithium without owning the underlying lithium assets with some brokers. The following are examples of derivative trading instruments:
I’m looking for a place to trade lithium futures.
However, there is one issue. Gaining exposure to the sector is exceedingly difficult and perhaps dangerous.
Lithium isn’t traded on any major exchange and lacks futures contracts or swaps, obviating one of the most common ways for investors to obtain exposure to a commodity.
This means that the greatest approach to learn about lithium’s narrative is to invest in stocks, but this isn’t as simple as it may appear.
But, before examining how to enter the lithium market, it’s important considering what the excitement is all about, and whether it’s justified and sustainable.
According to data by consultants CRU, lithium prices in China have surged from around $7,000 per ton to over $20,000 recently, while lithium carbonate, the component used in batteries, has grown by 76 percent in the previous year.
The bullish tale of lithium can be attributed to the so-called Tesla effect, which states that the rapid expansion of electric vehicles would increase demand for the light metal beyond present levels of supply.
Is there an ETF for lithium stocks?
The Global X Lithium & Battery Tech ETF (LIT) aims to produce investment outcomes that are broadly comparable to the Solactive Global Lithium Index’s price and yield performance before fees and expenses.
Tesla gets its lithium from where?
In a report on the Shenzhen Stock Exchange today, Ganfeng Lithium Co Ltd and its subsidiary GFL International Co Ltd stated that they had inked a three-year supply agreement with Tesla.
Ganfeng did not specify how much lithium they will deliver to Tesla, but they did say that the agreement will begin in 2022.
Tesla has become more involved in the raw material supply chain for battery cells in order to help hasten the transition to electric mobility.
Despite the fact that it has only recently begun manufacturing its own cells, the automaker has been securing supplies of lithium, nickel, cobalt, and other minerals for its battery cell suppliers.
Tesla began to sign contracts for off-take agreements with junior mining businesses hoping to create new mining projects that would improve the availability of some crucial materials for batteries, in addition to dealing with established mining corporations.
These contracts, on the other hand, are more volatile because the projects must make it to production and frequently meet obstacles.
A North Carolina lithium project with whom Tesla had a supply deal slipped behind schedule earlier this year.
However, as the world’s largest lithium producer, Ganfeng Lithium is a distinct animal.
For manufacturers aiming to create huge volumes of electric vehicles, securing long-term contracts with large producers like Ganfeng is critical.
As lithium prices rise, battery producers and automakers alike are scrambling to win contracts.
Is lithium an attractive investment in 2022?
Albemarle is a lithium stock to buy in March 2022. (ALB) It has also proven to be a wise investment. Albemarle’s stock has risen 25% in the previous 12 months in a highly unpredictable market.
Is QuantumScape available as an ETF?
QuantumScape Corporation Class A is a publicly traded corporation in the United States that is a holding in 49 exchange-traded funds. In the US ETF market, QS holds roughly 14.0 million shares. With about 3.64 million shares, the Global X Lithium & Battery Tech ETF (LIT) is the largest ETF holding QS.