This guide covers the different ways you can trade lithium along with regulated brokers that offer such products. We also touch on reasons you might consider trading lithium, given its pivotal role in global industries.
Lithium is a high-demand metal that’s primarily used as a base-component for batteries. You can trade lithium through online brokers who offer various instruments.
Read on to learn why, where and how to get started trading lithium.
3 Reasons You Might Want to Trade Lithium
Alongside global demand for a commodity, other factors like technological advancement impact a commodity’s future price projections.
Constant Demand for Energy Storage
Most people need energy on the go, and this is only possible with a battery. Lithium-ion batteries are what allow the majority of your mobile phones, laptops, and even electric cars to function as ‘nomad’ technologies.
For example, Tesla’s gigafactory was projected to require over 25,000 tonnes of lithium to reach their target energy output of 35Gwh per year.
Slow Battery Innovation
The need for large storages of energy, largely portable, has plagued a handful of tech giants from Tesla to Apple. Lithium-ion batteries are still the most popular and most efficient batteries in commercial use today, and it doesn’t look like that will change any time soon.
Lithium-ion batteries are getting larger and larger, and so more lithium is needed. Though traders are advised to consider other battery technologies and their impact on lithium prices, like non-flammable zinc-oxygen batteries and hydrogen batteries with lithium-ion’s tenfold energy-weight ratio.
Pollution and Green-First Mindset
An environment-friendly approach isn’t necessarily an indicator that lithium rises are bearish, but alternative technologies like batteries fuelled by zinc and hydrogen are closer friends with mother earth.
For example, hydrogen-cell batteries are carbon neutral as they only produce heat and water.
Where to Trade Lithium
Lithium is a popular and widely traded commodity. Many companies shares like Tesla are greatly impacted by world-lithium trade. The following brokers offer lithium trading instruments like stocks and CFDs in :
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 73.90%-89.00% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
How to Trade Lithium
There is, unfortunately, no way to invest directly in the lithium commodity, this is because there are no exchange-traded futures as with other industrial metals such as copper, nickel, and aluminum.
There are, however, ways for traders to gain exposure to lithium prices through trading in shares and derivatives of companies involved in the lithium industry.
Lithium Derivatives Like CFDs and Options
Some brokers offer various derivatives instruments that are not directly lithium as the commodity itself, but various price tickers in relation to it.
- Options contracts on lithium indices and companies
- CFDs on lithium indices
- Futures contracts on lithium indices
Shares in Lithium Stocks
One Option is via the BITA American Lithium and Battery Metals Giants Index or BALITG.
The BALITG captures the Gross Total Return Performance of the 15 largest American publicly listed companies with direct revenue exposure in extraction and commercialization of metals used for battery production.
Alternatively, the 15 companies listed below are publicly traded companies involved in lithium mining or processing.
Important: This is not investment advice. We present a number of common arguments for and against investing in this commodity. Please seek professional advice before making investment decisions.
|Sociedad Quimica y Minera de Chile||The World’s largest lithium producer and a leader in producing lithium compounds.||New York (NYSE)||1968|
|Albemarle Corporation||Specialty chemicals company and an industry leader in lithium and lithium derivatives products.||New York (NYSE)||1984|
|FMC Corp.||Diversified chemical company that extracts and processes lithium.||New York (NYSE)||1883|
|Liberty One Lithium Corp.||Canadian-based exploration company developing lithium brine deposits in the West Argentina.||Calgary (TSXV)||1996|
|Lithium X Energy Corp.||Operates two wholly owned brine projects in Argentina.||Calgary (TSXV)||1997|
|Altura Mining Limited||Australian-based lithium raw materials producer with a hard rock extraction project in Western Australia.||Sydney (ASX)||2000|
|Nemaska Lithium Inc.||Supplier of lithium hydroxide and lithium carbonate supplier to the battery market.||Toronto (TSE)||2007|
|Critical Elements Corporation||Early-stage lithium exploration and mining company based in Canada.||Calgary (TSXV)||2006|
|Neo Lithium Corp.||Operates a brine operation in the southern end of the Lithium Triangle.||Calgary (TSXV)||2016|
|Dajin Resources Corp||Canadian-based mining company engaged in the acquisition, exploration and development of lithium deposits.||Calgary (TSXV)||1987|
|International Lithium Corp.||Manages four joint-venture lithium projects in Canada, China, Ireland and Argentina||Calgary (TSXV)||2009|
|Pilbara Minerals Limited||Australian-based minerals mining company that operates lithium mining projects in Western Australia.||Sydney (ASX)||2005|
|Galaxy Resources||Australian company that operates lithium production facilities, hard rock mines and brine mines in Australia, Argentina and Canada.||Sydney (ASX)||1996|
|Lithium Americas||50% owner of the largest lithium brine deposit in the world.||Toronto (TSE)||2007|
|Orocobre Limited||Australian industrial chemicals company and lithium miner.||Sydney (ASX)||2007|
*Price information is delayed by 5 seconds and should not be used for trading purposes.
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