Lithium is a hot commodity, but despite its popularity many investors remain uncertain about whether now is the right time to get into the market.
At last week’s Mines and Money conference in New York, Howard Klein, founder of RK Equity and author of the Lithium-ion Bull newsletter, shared his thoughts on that topic.
“It’s early, it’s definitely not too late,” he said at the sidelines of the show. While there was “a rerating of sorts” for the industry at the end of 2017, “since the beginning of the year there’s been a big selloff.”
According to Klein, this shakeout is an opportunity. “There’s an opportunity for those who missed it last year to … come back,” he explained. “But you still have to be selective and understand which are … the highest-quality companies and projects and enter at the right price.”
Speaking about supply and demand, Klein laid lithium surplus concerns to rest, calling them “very overblown.” He added, “it’s economics 101 … demand is outpacing supply, therefore prices are going to remain high for quite some time — in particular for lithium carbonate and hydroxide.”