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Lithium, new the most precious commodity

Lithium, new the most precious commodity

Thanks to the huge demand for the rising demand for electric cars and the total thrust to a larger electrical storage capacity.

Morningstar claims that the market for lithium stocks already reflects the outlook for a significant rise in the price of lithium given the expected "massive growth in demand" for this commodity. The outlook of Morningstar is the demand for lithium will increase sixfold in the coming years to 1.9 million tonnes in 2030. So it will be mined where it requires higher costs and lower commodity quality, and Morningstar expects lithium prices to rise based on the industry's estimated cost curve at $12,000 per tonne.

The biggest producer in the world of lithium is the company ALB. The current capitalization of ALM $18.6 billion. However, their free cash flow is in negative numbers for 2 years. They invest more than earn. To justify the current capitalization, these companies would have to shift their free cash flow from red zeros to hundreds of millions of dollars, in the longer term, to billions of dollars.


Performance of ALB’s shares (