5 Lithium Stocks & Detailed Sector Analysis (ALB, SQM, ALTM, SGML, PLS)

I have looked at the top 10 lithium stocks and lithium producers to figure out the longer term supply and demand balance and consequently predict a conservative lithium price to use for lithium stock valuation.

0:00 Lithium Supply & Demand
3:59 Lithium Supply Gap
6:44 Lithium Price Forecast
10:00 Albemarle
13:26 SQM
15:41 Arcadium
16:19 Sigma Lithium
18:16 Pilbara
19:40 My Strategy

Lithium Report https://sven-carlin-research-platform.teachable.com/courses/stock-market-research-platform/lectures/50924583

Arcadium (Livent) Video https://www.youtube.com/watch?v=Rbdt0RYuRkA

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Good day fellow investors lithium stocks have been hammered over last year as lithium prices fall as lithium prices fell and now that prices are low everything is cheaper now is the time to dig into the sector not a year two years ago when everybody was over the moon

About lithium stocks so we look at every company at the sector at the leum demand and Supply to give you an overview of when to strike and take advantage of the almost certain cyclical lithium opportunity that is arising and immediately on the lithium supply and demand I have looked at the top lithium

Producers and written down their expected growth in production by the following years and the key here is that if you sum things up you get to 2.5 million tons of leum as Supply over the next 3 4 years on average 2027 however when I compare that to statista expected demand for lithium I

Get to 2.5 million tons for expected Demand by 2030 compared to already Supply hitting that number by 2027 by just the top 10 miners thus over the next 3 four years given the high level of supply and lower demand except for some Miracles it will look ugly for lithium miners this

Doesn’t mean we can’t make money on it but it means that it simply won’t be as easy as some producers expected like Albert marle where they said lithium prices will be 20,000 going forward that’s needed to cover for the huge growth in demand and but it will be

Choppier like it is normal for Commodities and even here Supply they say 3 million tons compared to demand of 3.7 million here but actual more conservative estimations are for 40% below Alber marless expected demand so there is a huge difference and this difference concludes in lithium price

That we discuss also in the forecast in a little bit whether it will be 8,000 per ton or 20,000 everything is driven of these prices stock prices and investment returns as everything depends on the price we need to look into what can the price be going forward especially year

By year when you look at all other projections those are all linear what we need is under understanding the supply and demand balance and then striking because it is never linear if you look at Alber marles presentation here they expect linear 5x growth in demand by 2030 they have even increased the

Predictions by 15% at the end of 2023 of course too exuberant but those linear projections are over to linear and just a small difference in growth between 18.1 and 199 .6 comes out in a huge difference in the market supply and demand balance and then 8,000 or 20,000

Price per lithium ton that’s a huge difference I have even made some more exuberant estimations differences 20% growth going forward five or 2.87 let’s say in 2029 based on current prices so one thing is certain as here ego shows that over the next few years we will have most likely lithium over

Supply and then only by 2028 2029 we will have a supply deficit but this is exactly what I want to discuss here this will create the opportunity to take advantage of this cycle because if you look a little bit here you see that over Supply mean very low prices with

Commodities the cure for high prices that we have seen over the last two years are high prices everyone invest in production as we have seen everyone is planning on growth thus over Supply prices are low if prices are low for a year or two few will invest in growth

Because they simply don’t have the money it’s risky you never know when will this cycle end and then sooner or later the cycle ends and then prices shoot up again which is the cycle opportunity a little warning on this long-term Supply deficit you see here that everyone

Expects lithium demand to grow but that it is limited Supply and therefore Supply Gap will open lithium prices will shoot up like it has been the case over the last two years however let me just give you a different indication as I have been investing in commodities for the last

Almost 10 years and this is a presentation from Freeport copper Miner from 2015 and you can see here their expectations of total copper consumption demand going to 45 million metric tons in 2024 Supply remaining flat or even going down by 2024 this is wood McKenzie the same guys that estimate your lithium

Forecasts this is from 2015 what has actually happened demand did grow but not to 35 it came to 27 M Supply did not stall it grew to 24 plus Recycling and you now have a copper sufficit in 2024 in place of the copper huge deficit that they forecasted here always take

These estimations with a pinch of lithium because usually those are too exuberant compared to reality and just we’re talking about fingers smash that like button please because it supports the channel now going on to lithium price forecasts lithium prices have really crashed from a very high level above 50 60,000 depending on the

Contract to the current 13,000 also span prices have crashed those are now at 1,000 per ton I think and those were reaching almost 7,000 per ton just a year ago this is absolute Destruction for lithium producers but there is something more important when it comes to pricing and that is the cost

Curve miners will produce as long as they make cash when they mine their commodity and in this case if you look at the highest cost producer for 2028 expected is at somewhere around 9,000 so prices went to 60,000 but the cost of these miners are relatively low and then

If demand is a little bit less than expected those prices can go even lower this is 2028 so with the huge amount of Supply coming onto the market now we could see this six 7,000 prices for a little bit longer where only the highest cost producers are pushed out of production similarly

For the lithium Rock production the costs of production are extremely low 250 400 600 and only the top producers reach a th000 therefore when you think about the pricing this should be low were four longer especially given the growth going forward and producers predicted higher prices but if I look at

Goldman’s prediction going forward again the prediction can only be linear but look at lithium prices those are never linear but they predict 11,000 this means that prices will go much lower and much higher so this will be the final result you buy here here you sell here

And you make some money in the cycle but if we cut a little bit the exuberant expectations prices won’t be 20,000 on average 10,000 means that in bad times will be eight in good times 15 and that is the cycle you want to take advantage of span 700 good times around

1,300 and there are many things that can impact lithium prices recessions EV demand interest rates tax benefits from governments technology mining Investments Etc that is all connected but that is all very very normal in a commodity cycle exuberance leads to high production Investments low prices that then stop Investments as demand grows

You eventually end up with a new cycle let’s dig into to the companies ALB Mara the stock has crashed 60% the market cap is now 15.6 billion but the company is still executing on their plans of growth they want to hit 3x growth by 2030 and now something that is very peculiar

Because usually producers miners never discuss their forecast in money but just in how much they produced and alar getting high on the high 2022 2023 prices they said we’re going to make this much money this much profits going forward because of the huge Productions we’re going to have the sales we’re

Going to make on extremely high prices prices are not 25,000 as they expected but now are closer to 10,000 and that makes a big difference of course the company is Diversified they have production Australia Argentina Chile this is important we’ll discuss later for sqm not that important for Alba

Marle but if they keep doing their things they will be profitable in whatever environment because of their low cost but when it comes to valuation they won’t be making these huge amounts of cash flow but the costs are there so they will likely make zero or one

Billion or likely zero in a bad over Supply situation and therefore it’s hard to Value them however there is value in the assets they have and I think that you can consider buying this at s to 10 billion market capitalization which is more appropriate now this is a video

This analysis report there is a 70 page report you can read this calmly on my research platform Link in the description below you can check the report also check a little bit what I do on my research platform the covered stocks there are now Four Strong buys

That I have remember there is a 21-day money back guarantee check it see how the investing style fits you and whether it can add value to your investing over the long term so the risk and reward with Alba Marlin Now isn’t that positive I would wait if it goes lower then it is

Getting closer to a buy if it goes higher well that is cyclically investing and even if they reach two three billion or lower lithium prices market capitalization of 30 billion down the road it’s just doubling your money in seven eight years which is not enough to justify a

50% decline here very important to look at with the projections here if we look at ear earnings per share estimates from Wall Street for Alba marle yes you look at the averages and the averages go down and then again up but look at the low

Six if they make $6 per share in 2024 and 2025 the stock is extremely overpriced of course if they hit 44 in a new exuberant cycle then the stock is cheap but I think Wall Street analysts will have to adjust this quickly sqm Chilean minor and I looked at Seeking Alpha and

Everyone has them as a strong buy a buy byy bye buy and uh I don’t think that they are seeing the elephant in the room there because yes it is a good Diversified business and okay there is a strong dividend yield that will likely be cut there is not crazy growth and

There is no crazy growth because you will see in a moment before that I think that the the revenues will get lower but given their diversification and low cost they will make around 1 billion so of course I would prefer it at below 10 billion to say it’s fairly valued but

Okay however if we look at their agreements with the Chilean government this was recently introduced a few years ago if lithium prices go higher 40% of what they make has to be given to the government then you say okay this is part one of the elephant in the room

Part two they just had a memorandum of understanding with codelco because their concessions expire in 2030 and codelco owns the concessions from 2025 to 2060 and now the plan is that they will establish a new company that will be mostly owned by codelco so sqm from 2030

Is already at 1 half of what is worth now and then at the mercy of the government and what the newo will be giving them of course 70% of operational profit of the business goes to Texas so this is something that is simply too much for normal investors why should we

Invest there I don’t know why are people investing there likely because of the market cap and then everyone thinks oh the market is thinking like that but you should check the elephant in the room with sqm it is extremely uncertain nobody knows what will happen in two

Years could be positive could be not positive but too big a risk for me Arcadium lithium the previous lent now don’t get scared lant didn’t crash 70% this is 2.4 of leant shares so the market cap now is a billion shares around 6 seven billion for Arcadium after the merger of

Lent and Alem they also plan FreeX growth over the next years with all their projects there to look more about that just look at the video link in the description below or in the cards on this video leave there is the discussion the next one is Sigma traded also on

NASDAQ but also in Canada this is around $3 Billion US the stock is down but not yet as much as it should go down and you will see why so we have growth expected and nothing wrong with that if you look at Forex in growth going forward you

Look at how much money they made in just a quarter then you think okay they will make a lot of money going forward Forex this by quarters Forex this by growth and you have profits of around 400 million per year which is not bad plus if you look at their technical reports

For their project their growth and the cash flows there are staggering phase one 1 billion per year for the first six years phase two and three again 2.5 billion high peak of cash flows and the market cap is just three billion but check deeper the technical report and

You will see that their estimated prices for spum rock is around 6,000 for the first 5 year and then declining to 2,000 reality now is as they start producing prices will be around 1,000 if lower as those are now those have crashed from very high levels and if you look at the

Sensitivity the green line is spum in price 9 billion Net Present Value with 6,000 spum in prices I think the average for the whole project is 4,000 20% down we are already at 7 billion so that’s 32,000 but if we go to 1,000 the value the net present value is negative so

This is not an investment for longer term investors of course there can be ups and downs but those are not bets that I want to make now a very interesting is fi bar minerals and you can see that the stock is down I think just 14% unlike all other lithium Miners

And market capitalization 11 billion Australian dollars what’s that 78 billion US dollar they own the pil gangora mine in Australia 8% of lithium supply they plan to increase production to 1 million tons of spodine so doubling it almost from current situation and then going forward but still 4,000 was

The average price last year the average price going forward is is 1,000 which leaves us with a gross margin of 300 million ebit 250 net profit after tax 200 million cash of 300 million of course when they double the production that will be 600 million US Dollars that’s a billion Australian dollars

Almost so it is not expensive and that also explains why the stock isn’t crashing as all the others and they have very very low production costs which means they will be profitable at whatever price out there and you can see here the growth going to 1,000 tons per anom now what’s my

Strategy with lithium I like this situations with low prices on my research platform we have bought for example glenor here in September of 2020 and that did pretty pretty well and that’s what I’m looking at the cost curve when prices hit the cost curve then it starts eliminating new

Production it starts eliminating costly production and then the cycle bottoms plus we can follow the demand how much are things growing Tesla is not growing as it was growing earlier so some subsidies have been cut so globally there might be slower EV growth ahead which means with the fixed growth by

Miners prices could be much lower than expected below cost and that is something that I follow over time I still have to write deep Dives on my platform here you can check it as I have said check my research platform for updates for new analysis and subscribes to this channel for more interesting

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