SQM shares scale in June on anticipated rise in demand for lithium

Imports from China and Japan increase

Almost 19% have risen the series B shares of the non-metallic miner SQM in the last 30 days and more than 71% since its collapse on March 23, along with the boom experienced by lithium producers, such as the United States. Albemarle (with an increase of 13% in 30 days) and the Chinese Tianqi (+ 10.1%).

According to foreign analysts, these increases are due to an early recovery in demand for lithium, triggered by strong purchases from China and Japan. A phenomenon similar to that enjoyed since the end of May by copper and iron, but which still did not favor lithium.

What changed? For Plusmining CEO, Juan Carlos Guajardo, there are particular elements that have improved the lithium landscape. Among them, the emergence of new and better lithium batteries, added to China’s five-year plan, which raises the need to accelerate electromobility in that country, all added to the rapid economic recovery of that country after the pandemic.

“But more important than all of the above is that ultra-expansive monetary policies in the world have generated that many markets, including lithium, receive positions from investors who are increasing prices,” he adds.

In this context, according to Guajardo, “commodities (such as lithium, copper and iron) have once again been on the radar of investors, and that is supporting increases such as those of SQM, Albemarle or Tianqi.”

He added that since the covid-19 crisis will remain in the world for a couple of years and, coupled with them, expansionary policies, “there will be a tailwind for stocks and commodities, although the new risks” associated with the pandemic.

The recovery expectations in the lithium sector are high, since although the prices of the shares linked to this industry have risen, the price of lithium carbonate, for example, has remained at US $ 7,000 average per ton, very below the $ 11,000 of 2019.

But the low price of lithium “is masking an impending supply deficit, especially as the covid-19 crisis has delayed expansion projects,” according to Japanese battery producer TDK CEO Shigenao Ishiguro.

Now the prospects for electromobility are positive. According to Bloomberg, global sales of electric cars will go from 2 million in 2019 to 8.5 million in 2025 and to 26 million in 2030.

Source: La Segunda

Translated with Google Translator