How to Invest in Lithium
Lithium is a soft, silver-white metal that is highly reactive and flammable. Its unique chemical profile makes it the lightest metal and the least dense solid element. This metal is perhaps best known for its use in lithium batteries common in all sorts of electronics devices. Lithium has several other industrial applications as well, including use in heat resistant glass and ceramics, alloys used in aircraft, and lubricating greases.
As an investment, lithium makes for an enticing play on the growing demand for energy efficient technologies. Lithium batteries, which are far more efficient than traditional nickel-metal hydride batteries, are seeing an increase in demand from the automobile and electronics industry alike. Limited supply is another appealing factor that makes this metal a potentially lucrative investment. For those looking to invest in lithium, there are a number of options in the marketplace. While physical exposure is not possible, investors can buy a number of companies which are engaged in some aspect of lithium production. Lastly, investors can also purchase a lithium ETF which offers exposure to a basket of commodity producers.
Ways to Invest in Lithium
There are 2 ways to invest in Lithium : ETFs and Stocks. Click on the tabs below to learn more about each alternative.
What are Lithium ETFs?
Exchange traded products can be an efficient way to access lithium. The most targeted product is the Global X Lithium ETF (LIT), which offers investors exposure to the performance of the lithium industry. This ETF holds a global portfolio of companies engaged in everything from lithium mining to exploration and lithium-ion battery production.
How to Buy Lithium Stocks
There are a wide variety of companies who rely on lithium for a substantial portion of their revenues. One of the biggest is Sociedad Quimica y Minera (SQM) which is a Chilean producer of specialty plant nutrients and chemicals that maintains lithium production operations. Philadelphia-based FMC Corporation (FMC) is a diversified chemical company which also focuses on this rare metal. Rockwood Holdings (ROC) is another prominent manufacturer which is focused on the production of lithium chemicals.
Lithium in the News
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