Saturday, December 28, 2024

Lithium"s Comeback Is Set For 2025

Lithium"s Comeback Is Set For 2025

Practical Investment Analysis for the New Energy Economy

Lithium"s Comeback Is Set For 2025

Alex Koyfman | Dec 28, 2024

Dear Reader,

Earlier this week, Mining.com predicted a ‘modest’ recovery for the lithium market in the coming year. 

It should seem strange to any objective observer, as the very same article also pointed out that lithium has been growing at or around 25% annually, for years, and expected to do the very same in 2025. 

lithium demand

So why would the lithium market, which has been beaten up for years now, only see a mild recovery when demand continues to soar — pushed by multiple sectors, all of which are experiencing periods of accelerating growth in their own right?

The answer, they’ll tell you, is rooted in overproduction and disappointing growth in one of lithium’s primary markets — the electric vehicle industry. 

But I’m going to argue that it’s something else. Something less tangible, yet more powerful as a market-moving force that keeps lithium’s price out of line with demand. 

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It's Not Just A Market Force... It Is The Market

Human psychology. 

You see lithium investors — even some of the biggest, most experienced out there — lost their affection for it after the lithium bubble burst in late 2022. 

I’m talking about a greater than 80% decline, from peak prices to where we are today, and the only thing to blame there, as the case is with any bubble at any point in history, is the over-exuberance which inflated the prices to begin with. 

Lithium had been branded the fuel of the future, destined to power everything from watches to airplanes, which in turn led to a spike in speculation that propelled prices to over $80,000 per ton. 

The thing is, lithium still is all of those things. 

Even as investors started eyeing windows to jump out of, world lithium demand continued to grow at a fairly predictable rate across a wide spectrum of product classes. 

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Why Do We Give Up Even When We Know Better?

But scars like this are slow to heal and depending on the initial damage, can turn entire swarms of investors off for life. 

It’s happened multiple times in history, but if there’s one thing that we can say for sure is that the lithium market will certainly be back and will exceed previous highs in due course. 

Just take a look at the most prominant examples of exuberance-driven bubbles, housing and tech, which collapsed in 2007 and 2000, respectively.

Anyone old enough to have been trading in march of 2000 will never forget the tech bubble’s collapse after investors lost confidence in growing Silicon Valley valuations. 

The Nasdaq lost 78% initially. 

tech bubble

It was enough to cause a mild recession and seemed like the end of the world back then, but looking at how the Nasdaq has performed in the years since, that calamity is barely a blip on the radar. 

The Tech "Bubble" Was More Like The Tech Beginning

Indeed, most growth in tech has taken place after the burst and continues to accelerate today with the emergence of new industries like crypto and AI. 

Housing, which peaked in 2006, took a downturn in 2007 and helped to precipitate the Great Recession in 2008 erasing trillions in wealth. 

housing bubble

But look ahead, and some of the greatest, fastest–paced periods of growth for the industry followed. 

Housing grew by more than 90% between 2012 and 2024 and has gained almost 50% in just the last 4 years alone. 

And it’s happened again since, with Bitcoin and the crypto market in general, with collapse following initial exuberance, then followed by a huge recovery and rally to new highs. 

Lithium, driven by unstoppable demand, is headed in the obvious direction and the obvious step for any investor — especially those who lost in 2023 — is to find the best way to get in, right now. 

Two Ways To Make Lithium Work For You In 2025

For me, there are two ways to play this coming market rally. 

One is to invest in what will very likely become the biggest lithium mine in North America, and perhaps the world. 

A huge and unique project on the site of an ancient supervolcano eruption, this mine was first approved by Donald Trump during the last days of his first term. 

Right now, despite ground-level lithium prices, development of the site is approaching a fever pitch with investments from the Federal Government and General Motors, making it one of the most exciting mining stories of all time.

And the other represents an altogether new kind of lithium production with no exploration or mining required. 

This company has a technology which can filter lithium from oilfield brine, giving the potential to oil and gas companies to diversify into lithium production in just a few weeks time. 

This is some of the cheapest lithium there is, and the company that’s developed this technology is already lining up agreements with major North American oil and gas producers.

Both of these companies are underbought, underpriced, and potentially disruptive to the lithium industry and battery supply chain  on a global scale. And not a minute too soon, as our current lithium suppliers grow more and more hostile by the day. 

Want to learn more? Check out this video presentation on Trump’s revolutionary new lithium extraction technology as soon as possible.

Fortune favors the bold,

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Alex Koyfman

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His flagship service, Microcap Insider, provides market-beating insights into some of the fastest moving, highest profit-potential companies available for public trading on the U.S. and Canadian exchanges. With more than 5 years of track record to back it up, Microcap Insider is the choice for the growth-minded investor. Alex contributes his thoughts and insights regularly to Energy and Capital. To learn more about Alex, click here.

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