A new commodity supercycle is being driven by a massive energy transition …And two elements are experiencing a supply squeeze that is creating huge opportunities for investors. Mentioned in commentary includes: Ballard Power Systems Inc., Lithium Americas Corp.
Also Read: Helium: The Most Important Resource No One is Talking About
The first is lithium, the super metal fueling the EV and energy storage boom. The second is helium, the key to future tech innovation and an irreplaceable necessity for semiconductors, which are also undergoing a long-running supply squeeze. Lithium prices have surged 500% over the past year on the fast-paced global adoption of EVs.
BNEF predicts that before the end of this decade, the battery sector’s lithium consumption will soar to 5X current levels.
Mining.com’s EV Battery Metals Index has more than quadrupled since mid-2020, and rapidly falling EV battery prices are shifting this race into fifth gear.
Helium, too, is in dangerously short supply ever since the U.S. Federal Helium Reserve in Texas auctioned off its remaining stockpile and closed its doors forever, taking some 40% of supply off the market late last year …
That’s a nightmare for the auto industry, at large, with the giants forced to suspend production and miss vehicle targets. Why? Because a single car typically needs over 3,000 semiconductor chips.
They need helium to manufacture those chips, and there may be no element that can replace it or come close to its cooling powers, which also makes this gas critical to the world’s most important scientific research and technological innovations … from space travel, cryogenics and the Large Hadron Collider, to everyday technology such as MRIs and fiber optics.
With prices hitting $280/Mcf in 2019 during Fed auctions, helium can now sell for up to $600/Mcf. It’s wildly more expensive than natural gas–even in the middle of an unprecedented gas price surge.
Now, for both lithium and helium, it’s all about who can make the next significant discovery the fastest, creating new opportunities for investors to get in on what could be the supply squeezes of the decade.
Lithium
Upgraded by three analysts last week alone, Lithium Americas (LAC) is solidly positioned to take advantage of the lithium craze with its Thacker Pass mine in Nevada.
Would-be investors have been horribly impatient with lithium, that’s largely because the soothsayers started pumping up lithium long before it was ready for the supply squeeze and the surge in EV and energy storage demand. But all good things come to those who wait…LAC is up around 34% over the past 12 months, and looks very well-positioned for more growth this year, in tandem with a global lithium market that is set to top $8B over the next 5-6 years.