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31/10/17

12:07

Post #: 28347852
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Originally posted by FlashFish ↑

https://etfdailynews.com/2017/10/26/lithium-etf-lit-could-be-setting-up-for-another-big-rally/

Lithium ETF (LIT) Could Be Setting Up For Another Big Rally

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October 26, 2017 6:34am NYSE:LIT

From Sean Brodrick: In August, I told you there were 18 lithium-ion battery “gigafactories” being built or planned around the world.

That seemed reasonable. But what a difference just two months makes …
Now, Tesla has announced that it is going to build a new gigafactory in Shanghai. That’s on top of Tesla’s gigafactory in Nevada and its other facility planned for Buffalo. This makes TWENTY-FOUR such gigafactories being built or planned around the world.
That’s right. In the past two months, six more gigafactories hit the drawing boards.
And you know what? I don’t think we’re anywhere near done. I believe there are many more to come.
After all, look at the change in planned lithium-ion gigafactory capacity from 2014 to now. This chart from Benchmark Minerals shows how much capacity experts thought would be built by 2021 …
Source
In 2014, experts thought a total of 39 gigawatt-hours (GWh) worth of li-on battery factories would be built by 2021. Now, today, that number has jumped to 372 GWh! That’s nearly a tenfold increase!
How did that happen? Well, Tesla’s new gigafactory in Nevada has a planned annual battery production capacity of 35 GWh. That’s nearly as much as the entire world in 2014.
And there are battery factories planned in China that make Tesla’s efforts look like small potatoes.
Which makes you wonder: Where is all that lithium going to come from?
I’ll tell you where some of it is coming from. From the companies in the Supercycle Investor portfolio. Recently, those picks were up 30% … 41% … and 112%. That’s AFTER I told subscribers to bank 112% gains.
The biggest open gain in the portfolio isn’t even lithium. It’s a cobalt miner … up 131%! It turns out lithium-ion batteries need plenty of cobalt, too.
I’m not here to toot my own horn. I’m just showing you the potential of these energy metals stocks.
I’ve told you about the amazing supercycle in lithium. It’s driven by the electric vehicle (EV) megatrend.
That megatrend is also driving cobalt prices through the roof. I told you about that, too.
And the miners that produce those metals? They have profit potential beyond the dreams of avarice.
Here is a chart of the Global X Lithium ETF (NYSE:LIT) …

This shift higher in demand has already begun. Lithium prices just hit a record high in China. Lithium carbonate prices in China moved up to $21.1-to-$26.3 per kilogram on Oct. 12. That’s up from $20.1-to-$25.3 per kilogram previously.
But ask yourself: How big could this supercycle get?
After all, in recent weeks, both Britain and France said that new internal combustion engine (ICE) cars will be banned by 2040. The Chinese government is pushing increased EV production by 2020, and is mulling a ban on sales of new ICE vehicles in the future as well.
So how much would demand for energy metals increase if the world shifted completely to EVs? Here’s a chart from Visual Capitalist …
Holy demand tsunami, Batman! We’d see lithium demand surge 2,898% … cobalt demand rise 1,928% … rare earths as a group up 655% … graphite up 524% … and nickel up 22%.
Zoom-zoom!
But surely, some might say, this would price lithium batteries right out of the market.
Nope.
Even with the increase in lithium that we’ve already seen, battery prices have decreased from over $1,000 per kilowatt-hour (kWh) in 2010, to under $250 per kWh in 2016. That’s because A) lithium is a small part of a li-on battery and B) battery makers are getting more efficient over time.
Sure, in a 100%-EV world, lithium batteries would get more expensive. But not that expensive.
Now, I’m not planning on a 100%-EV world anytime soon. It might never be. But the big shift – this megatrend to transition to EVs – is coming. And it is unstoppable.
That megatrend is pushing the energy metals supercycle relentlessly forward. It is gathering momentum. The supercycle is shifting into higher gear. Even as you read these words.
There are so many ways to play this. Lithium miners … cobalt miners … nickel miners … battery makers … car manufacturers … companies developing new processes that make for even greater efficiencies.
If you haven’t started investing in this megatrend yet, the Global X Lithium ETF is a fine place to start. It’s been less than two months since I mentioned the LIT in an article. Since then, it’s up 19%.
Zoom-zoom!
The Global X Lithium ETF (LIT) was unchanged in premarket trading Thursday. Year-to-date, LIT has gained 60.01%, versus a 15.26% rise in the benchmark S&P 500 index during the same period.
LIT currently has an ETF Daily News SMART Grade of A (Strong Buy), and is ranked #7 of 129 ETFs in the Commodity ETFs category.
This article is brought to you courtesy of The Edelson Institute.

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This chart:

...is a great example (a perfect example!!) of the perils of "believing" current forecasts in this space.

Just look at what it tells us: in 2015, "experts" forecast 70 GWh of gigafactory capacity would be built by 2021. Just 2 years later, these same "experts" revise up that number to 372 GWh.
This is what happens with accelerating demand growth and exponential technology cost and development progression.

What can we learn from this..? Well, for starters, take with a bag of salt those forecasts for demand/pricing etc looking ahead 3/4/5 years...

For me, it's just a reminder that while we all think we know what's unfolding, and those "expert" analysts all think they know it too, we don't really know much, and are extremely likely to be massively surprised to the upside on demand and pricing as that hockey stick starts to take shape.

For all the chartists out there, this is one chart that you shouldn't overlook, as it is essentially us (the observers/market/experts/punters) giving ourselves an uppercut three years in a row for so woefully underestimating the pace and trajectory that this rEVolution is on...

Next question is... how does the global supply of Lithium double by 2021 in order to supply this "current" forecast of gigafactory capacity..?

Hold on for the ride people, it's gonna get exciting!!

IMO DYOR you know the drill...

Last edited by GCar: 31/10/17

GXY Price at posting: $3.47 Sentiment: Buy Disclosure: Held
19 Upvote

0 Great analysis

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